31 Mar 14

Recommendations: Stock Exchange & Corporate Sustainability Reporting

More than a hundred institutional investors have developed recommendations for integrating disclosure on environmental and social issues into listing rules for stock exchanges worldwide. The proposal, released on 26th March by sustainability advocacy group Ceres, is part of an effort to develop a common standard for sustainability reporting for listed companies globally.  

Investors are increasingly considering sustainability issues in their decision making, but more consistent and comparable sustainability data is needed. The listing proposal recommends three requirements that stock exchanges should apply to help investors better understand companies' sustainability-related risks and impacts. These three requirements are that companies should:

  1. Explain their processes for determining which sustainability issues are material, or relevant, to report.
  2. Report —or explain why they don't report—on ten basic sustainability issues, including climate change and supply chains.
  3. Be clear on where the company’s sustainability disclosures can be found so that investors can easily access such information.

The World Federation of Exchanges (WFE) is looking to prepare a recommendation that will be voted on at its annual meeting in October.

If a minimum sustainability standard is recommended at the October meeting, then exchanges would likely issue guidance over the next two years to get companies that are new to sustainability reporting up to speed.

Investors are hoping for a mandatory sustainability listing standard for stock exchanges by 2016, which will have a huge impact on the adoption of sustainability reporting.

For more information, and to download the full Ceres proposal, visit this link

Non-Financial Reporting