INCR Proposed Listing Standard
INCR launched the INCR Listing Standards Drafting Committee to develop a consultation paper seeking investor comments. The resulting feedback from more than 100 investors around the world helped shape the INCR Listing Standards Proposal: Sustainability Disclosure Listing Standard for Global Stock Exchanges, which was submitted to NASDAQ OMX. The proposal provides recommendations for integrating sustainability disclosure requirements into listing rules for U.S. and global stock exchanges. The proposed standards pinpoint sustainability information essential to the investment process and provide companies flexibility while giving investors a more consistent presentation of data across markets, which is a key issue for evaluating sustainability risks and opportunities in investment decision-making.
The proposal contains three items of disclosure for a listing rule on sustainability disclosure:
- A materiality assessment in annual financial filings where management will discuss its approach to determining the company’s material ESG issues;
- ESG disclosure, on a “comply or explain” basis, on 10 key ESG topics in the format and location of the company’s choosing;
- A hyperlink in annual financial filings to an ESG Disclosure Index (table), based on the Global Reporting Initiative (GRI) Content Index or its Equivalent, indicating where existing ESG information can be found.
The INCR Listing Standards Proposal is a working draft; as such, feedback is welcome. Comments can be emailed to Tracey Rembert.
- Download the Listing Standards Proposal (Working Draft as of May 31, 2013)
- Download the initial Consultation Paper (April 5, 2013)
- Download Investor Comment Letters
Through the first part of 2014, INCR is encouraging stock exchanges to submit comments and discuss the draft proposal with issuers and stakeholders in each market. INCR is also encouraging the World Federation of Exchanges (WFE) to launch a Sustainability Working Group for its members—both to create more formal processes for receiving comments on the proposal and to propel exchanges and the WFE to make progress on the proposal’s recommendations.
The WFE, which is the trade association for the operators of regulated financial exchanges, has approximately 60 members around the world, representing more than 46,000 listed companies and a collective domestic market capitalization of $58.6 trillion.
Sustainability reporting was a discussion item at the World Federation of Exchanges 2013 Annual Meeting and General Assembly.