London Stock Exchange: Informed financial choices and learning about chocolate

Published by: Denzil Jenkins, Interim CEO, London Stock Exchange plc Sep 2020

2020 has been an unprecedented year. The Coronavirus pandemic has sent shock waves through the global economy and bought significant change to the way we live and work. The human cost of the pandemic – tragic loss of life, disruption to livelihood and education, continues to affect us all. Financial markets have seen exceptional market volatility. This has impacted not only the performance of individual pensions and investments, but also other aspects of the economy, affecting growth and jobs. While London Stock Exchange has supported companies and sovereigns to access capital to strengthen their positions and fund recovery, the need to support the capability of investors of today and the future is also key.

Financial education is increasingly important. Building financial literacy can have an impact on an individual’s life, from the savings we can build for our pensions and future generations, to funding our entrepreneurial dreams. The growing sophistication of our lives and financial markets means that consumers may often have to make complex financial decisions. Understanding the options is vital in deciding which is the best one.

London Stock Exchange is committed to helping consumers understand their financial options and learn more about the way that finance works. Londonstockexchange.com includes a “Personal Finance Hub” and a free tool, which enables anyone to create virtual portfolios of securities listed on London Stock Exchange, along with a selection of global securities. Through this, individuals can simulate stock market investments, monitoring and evaluating their performance. It’s a simple and secure way for anyone to get familiar with the world of finance. By enabling consumers to develop their understanding of financial markets and products, London Stock Exchange can play a vital role in allowing them to invest and benefit from the growth and opportunities created by UK and international companies.

More broadly, LSEG supports MyBnk, a UK charity that delivers financial education programmes for 5–25 year–olds. The charity focusses on key money management skills and positive financial habits to help young people develop their understanding of topics such as budgeting, borrowing, student finance and pensions.

Financial Literacy for Children

In April, as a response to the pandemic and subsequent closure of UK schools, LSEG launched a digital Financial Literacy for Children Programme to assist with home schooling. The programme includes videos created by another charity partner, City Pay It Forward. The videos are divided into primary and secondary school age content, covering topics such as how banks work and the role of a stock exchange. Children can also access case studies of companies listed on London Stock Exchange to understand how public markets support the real economy. These include some of the UK’s most entrepreneurial firms, such as video games developer and publisher Team17 and Hotel Chocolat, one of the world’s few chocolate retailers to grow its own cocoa, and companies that are part of the transition to a low-carbon economy.

The importance of the future, and hence sustainability, underpins the financial markets. As a result, environmental, social and corporate governance (ESG) and green finance is an important part of the Financial Literacy for Children programme. Protecting our environment and tackling climate change is one of the biggest challenges we are facing globally. As part of the programme, children can learn about how various companies listed in London are developing and investing in renewable energy, like solar and wind power. They can also learn how companies are finding more effective ways to manage and recycle our waste and inventing new technologies to make all of our daily lives and daily activities more sustainable. The role of a stock exchange can be vital in facilitating capital and investment to these companies. This funding is key to supporting innovation and growth and enabling consumers to be part of, and ultimately benefit from, the transition to a greener economy. 

The role played by stock exchanges

Every one of us is part of the financial ecosystem. But unless we understand it, we cannot make informed choices. This is why we support the WFE’s “Ring the Bell for Financial Literacy” initiative, which marks World Investor Week. London Stock Exchange will take part to highlight the importance of financial literacy, and to raise awareness of the role that stock exchanges can play in providing the right resources to consumers and students, and in helping them grow their financial stability. We will also be extending our Financial Literacy for Children Programme through collaboration with the Bank of England, adding new resources and webinars to our programme in 2021.

At London Stock Exchange, we believe that financial literacy opens options and opportunities for all. Whether it’s choosing what to study; which career to work towards; or learning about how to save and invest money later in life, understanding how finance works can help build a better future for us all.