IntercontinentalExchange Group, Inc.
|Company||Intercontinental Exchange, Inc.|
|Filer||Calvert Asset Management Company, Inc.|
|Resolved Clause Summary||Report on investor expectations for encouraging ESG disclosure|
|Status||Withdrawn; Ongoing dialogue|
WHEREAS: Managing and reporting environmental, social and governance (ESG) business practices assists companies to compete in a global business environment characterized by finite natural resources, changing legislation, and heightened public expectations. ESG reporting allows both companies and investment products to publicize and gain strategic value from existing sustainability efforts while identifying both emerging risks and potential opportunities. Without proper disclosure, analysts have difficulty comparing businesses or investment products. Without such disclosure, analysts cannot ascertain each investment’s ESG exposure in a manner that minimizes material risks.
To remain competitive, regulated exchanges, marketplaces, and clearing houses should be aware of current market trends that influence their ability to attract both listed companies and investment products such as futures, derivatives, indices, and commodities. Some peer regulated exchanges, marketplaces, and clearing houses have already launched sustainability initiatives that train issuers on best practices in ESG reporting, or that produce recommendations, rules or guidance on such disclosure.
Moreover, the London Stock Exchange requires listed companies on its main exchange (1,600 companies) to report total greenhouse gas (GHG) emissions. CME Group voluntarily suggests certain investment products should follow ESG guidelines as a condition of listing, assisting analysts in product side-by-side comparison. The Hong Kong Exchanges and Clearing Limited recommends issuers disclose company performance on over a dozen sustainability criteria. The Johannesburg Stock Exchange asks issuers to complete, on a “comply or explain” basis, one integrated report that combines both financial and ESG information. Furthermore, recently, NASDAQ OMX and IntercontinentalExchange, Inc.’s NYSE Euronext joined the Sustainable Stock Exchanges Initiative, where they have pledged to work with issuers to improve ESG performance and reporting. In fact, IntercontinentalExchange, Inc. currently derives a sizable portion of topline revenue from GHG emissions trading and other environmental products trading.
Finally, over 100 institutional investors have collaborated to produce a proposal (http://www.ceres.org/resources/reports/incr-listing-standards-drafting-committee-consultation-paper-proposed-sustainability-disclosure-listing-standard-for-global-stock-exchanges/view) for a listing standard for regulated exchanges on ESG reporting. In the past 24-months, over a half-dozen reports have been publically published assessing the ESG practices of certain regulated exchanges, marketplaces, and clearing houses. Proponents therefore suggest it is valuable for IntercontinentalExchange, Inc., and its Board, to better understand the disclosure trends and best practices in this field to stay abreast of market expectations.
RESOLVED: That shareholders request that our Board of Directors prepare a report assessing the current global expectations by investors for ESG market disclosure, and report to shareholders, by September 30, 2014, its findings and the Board’s recommended steps (if any, or its reasons for declining to make recommendations, if any) for encouraging ESG disclosure in the markets where IntercontinentalExchange, Inc. does business. The report should be prepared at a reasonable cost, omitting proprietary information.