Investor Listing Standards Proposal
INCR launched the INCR Listing Standards Drafting Committee in 2012 to develop a consultation paper seeking investor comments on potential listing requirements on sustainability reporting. The resulting feedback from more than 100 investors around the world helped shape the Investor Listing Standards Proposal: Recommendations for Stock Exchange Requirements on Corporate Sustainability Reporting, which was submitted to NASDAQ OMX in 2013. 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 Investor Listing Standards Proposal was submitted to the World Federation of Exchanges and its 60+ exchange members in March 2014; Ceres and the WFE will collect feedback from exchanges and present this data to the WFE’s Sustainability Working Group for its consideration later this year.
- Download the Investor Listing Standards Proposal
- Download the initial Consultation Paper (April 5, 2013)
For the last year, the IISE Working Group has encouraged 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 Sustainability Working Group was launched in March 2014, and a comment period has been opened for exchanges on the Investor Listing Standards Proposal.
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.