GLOBAL - Institutional investors have increased pressure on the world's largest stock exchanges to demand sustainability reporting by listed companies.
Some 24 investors representing $1.6trn in assets have written to 30 stock exchanges across the globe and comes after an initial "call to action" made by the group in September gathered support. (Global Pensions: 13 September 2010).
The move, led by Aviva Investors, is part of a broader collaborative engagement initiative launched by Aviva and facilitated by the UN-backed Principles for Responsible Investment (PRI) in 2008.
It aims to encourage stock exchanges to consider how to improve the quality of sustainability reporting by the companies that list on their exchange.
Exchanges including the Australian Stock Exchange, NASDAQ GS, Korea Exchange, Santiago Stock Exchange and Philippine Stock Exchang have the lowest number of companies disclosing ESG data.
Those with a large number of companies disclosing their data include Euronext Paris, Tokyo Stock Exchange, Helsinki, Euronext Amsterdam, Euronext Lisbon and Borsa Italiana.
One suggestion put forward by signatories including the Fonds de Reserve pour les Retraites, AP7 and the Australian Council of Super Investors, is a listing requirement for companies to consider how responsible and sustainable their business model is, and put a forward-looking sustainability strategy to the vote at their AGM.
Aviva Investors London CEO Paul Abberley said: "Markets are driven by information. A lack of information as a result of limited or non-disclosure of ESG data makes it difficult for long-term investors such as us to assess the wider ESG risks and opportunities associated with a company.
"We believe that stock exchanges can play a crucial role in helping to create more sustainable global capital markets because of their ability to directly influence and monitor the operations and strategy of companies seeking to access the equity markets. This can only be a good thing for investors."
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