Stock exchanges may be committed to ESG but more work is needed on diversity

Although stock exchanges are committed to environmental, social and governance goals, there is still work to be done on gender equality on boards, according to a survey conducted by the World Federation of Exchanges (WFE).

The survey found that 42 out of 49 exchanges have made a formal commitment to sustainability, but only 37% indicated they have targets for female representation in the workplace.

Overall, exchanges remain male-dominated, especially in more senior roles. While the overall percentage of women working at exchanges was around 42%, only 32% of senior management were female but only 21% at board level.

The survey also found that 96% reported demand for ESG disclosure, up from 70% in 2018. However, there was “no consensus” on the reporting standards required or recommended by exchanges, with an equal number of respondents – 27 out of 43 –  favouring the reporting standards of the Task Force on Climate-related Financial Disclosures and the Global Reporting Initiative.

Around half were promoting TCFD-based disclosures, while 41% plan to, but regulatory authorities currently recommend or require TCFD-based reporting in just 13% of jurisdictions, the survey found.

Nearly 90% of exchanges support the creation of the International Sustainability Standard Board (ISSB), the proposed standards of which can be adopted by exchanges once approved by the International Organisation of Securities Commissions (IOSCO).

As for products, 93% of exchanges showing at least some demand for ESG products, though 53% said it was rather limited.

Of 49 exchanges, 37 said they offer sustainability-linked products with the most commonly offered products were green bonds, social bonds and sustainability-based indices.

However, the survey found that progress is slowly being made and exchanges were moving in a more positive direction on inclusion of ESG in their markets and their own operations.

Only 33% of publicly traded exchanges were included in at least one sustainability/ESG index, though this is an improvement from 29% last year while 19% were working towards inclusion.

It was a similar situation with ESG disclosures — 96% said there is at least some demand for data but 56% of exchanges said it was rather limited.

Our new survey results highlight the vital role that the exchange industry plays in the shift towards a sustainable and inclusive global economy,” said Nandini Sukumar, Chief Executive Officer of the WFE.

She added, “It is encouraging for us, as an industry that has championed ESG in financial markets for more than a decade, to see a positive trend towards carbon neutrality accompanied by genuine interest and engagement in these issues from stakeholders.”

©Markets Media Europe 2022

Bank of England does not stem the pound’s slide

UK markets have been shaken to the core by the new UK government's tax...

Seamless Integration Needed to Bridge Digital, Traditional Assets

Natacha Dezert, Blockchain & Digital Assets Program Manager, and Aman Mehta, Sales Director and Digital...

AFME highlights pros and cons to a T+1 move

A move by Europe to a one-day settlement cycle (T+1) could bring significant benefits...

Bank of England does not stem the pound’s slide

UK markets have been shaken to the core by the new UK government's tax...

Seamless Integration Needed to Bridge Digital, Traditional Assets

Natacha Dezert, Blockchain & Digital Assets Program Manager, and Aman Mehta, Sales Director and Digital...

AFME highlights pros and cons to a T+1 move

A move by Europe to a one-day settlement cycle (T+1) could bring significant benefits...