The Sustainable Stock Exchange Initiative, which launched in 2009, encourages long-term approaches to investment and the adoption of sustainability reporting.
NYSE Euronext, the parent company of the New York Stock Exchange, is the eighth exchange to sign onto the initiative. Other member exchanges include Nasdaq OMX, Brazil’s BM&F Bovespa, the Johannesburg Stock Exchange, Egyptian Exchange, MCX Stock Exchange, Borsa and BSE.
BM&F Bovespa joined the SSE initiative last year ahead of Rio+20, the United Nations Conference on Sustainable Development. The exchange created a public database of reporting companies, which were made available at Rio+20. Johannesburg Stock Exchange has required listed, privately held and state-owned companies to file sustainability reports since 2010.
Countries including the UK and France have passed legislation requiring stricter rules for the disclosure of non-financial information on environmental and social issues.
Last year, the UK unveiled a government mandate that forces companies listed on the London Stock Exchange’s main market to publish the full details of their greenhouse gas emissions. The regulations, which kicked off in April 2013, will be reviewed in 2015, before ministers decide whether to extend the approach to all large companies from 2016. The London Stock Exchange is not a member of the UN-backed SSE.
Despite the increase of stock exchanges pushing new disclosure rules, weak enforcement mechanisms mean that most CFOs and investor relations directors will opt out of following the guidance, according to a report from independent analyst firm Verdantix.
The report found that even firms listed on stock exchanges with comprehensive non-financial reporting guidance “do not face financial, legal or reputational penalties for non-disclosure.”