By James Bonner, independent sustainability consultant
With an increasing awareness and understanding of sustainability issues growing over the past number of years, the concept of socially responsible investing (SRI) has developed in order to meet a growing demand from investors who have an interest in the area. SRI strategies, in general, consider the wider social and environmental impacts of the bodies invested in – both by the nature of products/services they are involved and their individual organisational practices.
A number of major Stock Exchanges from around the world have reacted to, or potentially stimulated, SRI practices and have developed specific indices for organisations which are deemed to meet set sustainability or corporate social responsibility criteria. Indeed, some Exchanges have established minimum sustainability reporting standards for all listed companies on their Exchanges and in doing so can be credited for advancing and progressing the uptake of sustainability and corporate responsibility reporting by businesses.
The World Bank’s International Finance Corporation highlights the role of Stock Exchanges in the financial sector’s approach to managing financial and other risks associated with the social and environmental impacts of businesses. From South Africa’s Johannesburg Securities Exchange as the first market in the world, in 2003, to require compliance with set corporate governance and sustainability reporting standards, to specific indices aligned with some of the major international markets (such as the FTSE4Good and the Dow Jones Sustainability Indexes) there have a been a range of efforts by Stock Exchanges to influence the sustainability disclosure of businesses.
As an introduction to some of the historical, and on-going, developments in such requirements by global Exchanges, the ‘Initiative for Responsible Investment’ at Harvard University has recently compiled a review of the corporate responsibility requirements and programs by Stock Exchanges from around the world (as well as national governments). You can view a table which extracts some pertinent examples from the study, highlighting disclosure efforts by specific national Exchanges, and the year such developments were introduced.
This post supports the debates and workshops taking place at ACCA’s Accounting for the future conference taking place this week.