Stock exchanges all over the world are trying to advance ESG investing. They aim to incorporate ESG considerations into listing rules, indexes and regulatory frameworks.
How can you benefit from this? Big stock exchanges, like the Nasdaq for example, offer ESG services not only to their listed companies, but also to investors. The Nasdaq ESG Data Portal provides a central database, compilation and repository for listing companies and investors, too, to access ESG and performance metrics.
Investors are able to integrate the data into their portfolio and quantitative analysis, equity research, and screening processes. The risk assessment of an individual company can be created and compared with peer firms in the same sector and market size category. Screening of potential investments considers operational efficiency, risk oversight and transparency.
International initiatives aiming to boost ESG investing
The Sustainable Stock Exchanges (SSE) initiative, a United Nations project, was launched in 2009 in New York. It is a partnership of exchanges to encourage sustainable, responsible investment, integrate ESG values into financial products and promote corporate sustainability reporting. By now, the SSE has 103 partner exchanges and 55 bourses around the world are providing guidance on reporting ESG issues for their markets.
There is a similar initiative in Europe. The members of the Federation of European Securities Exchanges (FESE), which represent 36 bourses from 30 European countries, run markets dedicated to sustainable finance, offer products that advance sustainable development and help track the performance of sustainable companies.