Abu Dhabi Securities Exchange introduces comprehensive sustainability report

By: H.E. Khalifa Al Mansouri, Chief Executive, Abu Dhabi Securities Exchange Jun 2020

In the United Arab Emirates (UAE), sustainability has become a critical success factor for companies to ensure long-term value creation. ADX’s first Sustainability Report responds to the growing demand among investors for enhanced transparency on listed companies’ Environmental, Social and Governance (ESG) practices. The report is the first across the region to be presented in such a comprehensive format and is expected to be updated annually.

ADX considers good sustainability practices as of prime importance to its long-term business growth. With its first ESG report ADX leads the market by communicating its sustainability initiatives and asserting its firm commitment to integrate sustainability as a core priority of its sustainable finance agenda.

The wide range of new products and services ADX recently introduced includes the Environmental Social and Governance (ESG) Disclosure Guidance for listed companies that encourages them to incorporate ESG considerations into their business activities, decision-making and reporting.

KPIs mapped

These guidelines support companies’ disclosure of ESG metrics across environmental, sustainability and governance issues. The 31 key performance indicators (KPIs) of the report are mapped against both the Global Reporting Initiative (GRI) and the Sustainable Development Goals (SDG).

The ESG report illustrates ADX’s commitment to support the implementation of the UAE’s sustainability priorities, accelerate sustainability in listed companies and integrate sustainability into ADX’s operational framework. It also shows our commitment to build up investment opportunities and be proactive in embedding sustainability in every dimension of investment strategy.

The report has four sections: Market Education, Technology and Innovation, Resilient Infrastructure and Responsive Marketplace. It supports ESG/Sustainability reporting and Sustainable Investment practices while providing investors with the information and tools they need through the provision of high-end technology services.

Raising awareness

By raising awareness and understanding of Sustainability Reporting and therefore motivating the listed companies to follow ADX guidelines when issuing their own report, ADX’s ESG Report raises the level of knowledge in Sustainability Reporting and enhances its quality.

ADX also held a series of workshops dedicated to the subject for its listed companies last year. These sessions highlighted the benefits of implementing sustainability standards and the importance of disclosing sustainability reports to attract new levels of investments. ADX’s ESG Report was presented as a provider of practical guidance on the Sustainability Reporting implementation process.

The workshops allowed participants to discuss the challenges faced in spearheading sustainability and how these challenges could be overcome. With its ESG report, ADX provides markets and products that support scaling-up sustainable finance and re-orientating financial flows.

As sustainable investments across the region are anticipated to grow further, ADX’s inaugural ESG Report is designed to meet the evolving expectations of both retail and institutional investors. As the first sustainability report of its kind in the region, it drives ADX’s sustainability agenda by advocating transparency and accountability.

Sustainable growth

It will also help to facilitate the transition to a new global sustainable development paradigm and mobilise the necessary investments to achieve sustainable growth. The ESG report is instrumental in supporting ADX’s strategy to remain the most vibrant and thriving sustainable investment Exchange in the region and in the implementation of the UAE’s sustainability priorities in alignment Vision 2021 and Abu Dhabi Economic Vision 2030.

The report comes a few months after ADX issued a set of ESG disclosure guidelines to encourage its listed companies to incorporate ESG considerations into their business activities, decision-making and reporting.

These companies are encouraged to adhere to ADX's index indicators, which are aligned with the Global Reporting Initiative (GRI), including 31 KPIs that form the ESG Disclosure Guidance rules.

These rules in turn comply with recommendations issued by the Sustainable Stock Exchange Initiative (SSE) and the World Federation of Exchanges (WFE), of which ADX is a member.