Exchanges increase number of ESG initiatives to meet demand

ESG education rises to second most sought after programme

Exchanges and clearing houses have seen significant advances in the level of ESG and initiatives on offer and being sought.

According to the industry group World Federation of Exchanges (WFE), the 2021 Sustainability Survey shows eight of 54 respondents participated in 12 ESG initiatives last year, up from five out of 61 respondents the year before.

ESG education initiatives have gone from being the eighth most sought after initiative in 2019 to second in 2021. On average, the number of sustainability initiatives each exchange is participating in rose from 7.7 to 8.4.

Further evidence, WFE stated, of exchanges’ increasing focus on a transition to a carbon neutral economy was the fact the number of exchanges implementing initiatives that meet all five of the WFE Sustainability Principles jumped by 17% to 69% last year.

As in 2020, sustainability concerns and opportunities for business expansion were the most cited motivations for respondents’ ESG engagement.

The distribution of efforts across the three ESG areas – environmental, social and governance – became more evenly balanced in 2021, 31.2%, 30.6% and 38.6% respectively, from 25.8%, 31.3% and 42.9% the year before.

Nandini Sukumar, chief executive officer of the WFE, said: “Our survey results highlight the vital role the exchange industry plays in the shift towards a sustainable and inclusive global economy.

“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.”