The World Federation of Exchanges Seventh Annual Sustainability Survey shows continued increase in engagement

By: The WFE Focus Team Aug 2021


The World Federation of Exchanges Seventh Annual Sustainability Survey shows continued increase in engagement

London, 14th July 2021– The World Federation of Exchanges (WFE), the global industry group for exchanges and CCPs, today published the results of its seventh annual Sustainability Survey.

The WFE Sustainability Survey is the only report that provides a picture of Environmental, Social and Governance (ESG) activity at market infrastructures across the world. It captures both the nature and extent of member engagement with ESG issues in both developed and emerging markets. Since its launch in 2014, the Sustainability Survey has consistently captured the growing engagement with ESG matters among the WFE membership.

The Sustainability Survey maps exchanges’ activities against the WFE’s Sustainability Principles, which all exchanges, both WFE members and others, continue to demonstrate sustained engagement with. Published in October 2018, these Principles state that: exchanges will educate participants about sustainability issues; promote the enhanced availability of ESG information; engage stakeholders to advance the sustainable finance agenda; provide markets and products that support the development of sustainable finance; and embed sustainability into the exchange’s governance, strategy, and organisational structures.

A total of 62 exchanges participated in this year’s survey, of which 8 were WFE affiliates. As in previous years, the survey questionnaire was revised to capture the latest exchange-related sustainability developments. This year, questions were added to gauge the adoption of different standards used to define sustainability, to understand the balance between ESG efforts and to highlight gender balance at the board level.

Notable highlights from this year’s WFE survey include:

  • 50.8% of exchanges had initiatives in place that correspond to all five Sustainability Principles - a 10 percentage point increase from last year.
  • ESG is an integral part of exchanges’ strategies and ethos, as the average number of initiatives implemented per exchange increased from 6.7 to 7.7.
  • Whilst Governance was an area where exchanges placed most of their sustainability efforts in 2020, there was an increased focus on social factors for example, facilitating the issuance of bonds aimed to support sectors affected by the pandemic.
  • Business and economic concerns are cited as the main barriers to implementing ESG initiatives, a reflection of the uncertainty caused by the pandemic.
  • Investor demand for ESG products continues to drive innovation. While green bonds are the most offered ESG products, offerings across all sustainability product categories have now increased, including Sustainability Linked Bonds (SLBs), which nine exchanges have reported offering.
  • For the second year in a row, a lack of convergence in ESG standards and disclosure formats continues to concern our members.

Nandini Sukumar, Chief Executive Officer, the WFE said: “Our survey results highlight the exchange industry’s continued leadership in sustainability matters. As we continue to emerge and learn lessons from the pandemic, exchanges will play a vital role in the shift towards an inclusive and sustainable global economy. As an industry that has championed ESG in financial markets for over a decade, we are pleased to see engagement and interest in these issues from a wider group of stakeholders.”

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About the World Federation of Exchanges (WFE):

Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 250 market infrastructure providers, including standalone CCPs that are not part of exchange groups. Of our members, 35% are in Asia-Pacific, 45% in EMEA and 20% in the Americas. WFE’s 57 member CCPs collectively ensure that risk takers post some $800bn (equivalent) of resources to back their positions, in the form of initial margin and default fund requirements. WFE exchanges are home to 47,919 listed companies, and the market capitalisation of these entities is over $109 trillion; around $137 trillion (EOB) in trading annually passes through WFE members (at end 2020).

The WFE is the definitive source for exchange-traded statistics and publishes over 350 market data indicators.  Its free statistics database stretches back more than 40 years and provides information and insight into developments on global exchanges. The WFE works with standard-setters, policy makers, regulators and government organisations around the world to support and promote the development of fair, transparent, stable and efficient markets. The WFE shares regulatory authorities’ goals of ensuring the safety and soundness of the global financial system.  

With extensive experience of developing and enforcing high standards of conduct, the WFE and its members support an orderly, secure, fair and transparent environment for investors; for companies that raise capital; and for all who deal with financial risk. We seek outcomes that maximise the common good, consumer confidence and economic growth. And we engage with policy makers and regulators in an open, collaborative way, reflecting the central, public role that exchanges and CCPs play in a globally integrated financial system.