INVESTING/PORTFOLIO STRATEGIES

Global investors, exchanges seek to develop ESG listing standards for companies

New York State Common Retirement Fund and BlackRock (BLK) are among the institutional investors in a Ceres-led group which launched an initiative to promote the integration of environmental, social and governance disclosures into the listing rules for companies listed on U.S. and global stock exchanges, according to a statement from Ceres.

The Ceres group is working with the World Federation of Exchanges, which formed a sustainability working group comprising representatives from stock exchanges worldwide, to develop an ESG listing rules proposal.

IntercontinentalExchange — which includes the New York Stock Exchange — Nasdaq OMX, CME Group, Chicago Board Options Exchange, Deutsche Borse, Shenzhen Stock Exchange and BM&F Bovespa — all WFE members — are among the exchanges that have committed to participate in the WFE group, according to a WFE statement.

“We know from experience that sustainable, long-term growth requires integrating ESG considerations into the investment process,” Thomas P. DiNapoli, New York state comptroller and sole trustee of the Albany-based $173.2 billion New York retirement fund, said in the statement. “A global standard for sustainability reporting would give investors data to assess performance and risk, while allowing exchanges and companies to address specific market regulations and cultures.”

Gwen Le Berre, vice president of corporate governance and responsible investment at BlackRock, said in the statement: “Cross-border collaboration by stock exchanges will help shift public companies towards more comparable and meaningful disclosure of (environmental, social and governance) risk factors. This will enable investors to more accurately value companies and make better informed investment decisions.”

Robert Greifeld, CEO of Nasdaq OMX, said in the statement, “We need a joint solution that will help bring more consistent and comparable information to all markets, and will not leave any one exchange at a competitive disadvantage for taking leadership in this space.”

A time frame for developing the proposal wasn't available.

Ceres is a coalition of institutional investors, environmental groups and other organizations encouraging companies to address climate and other sustainability issues.