The World Federation of Exchanges (WFE) has published the “Principles for Sustainable Exchanges” (the Principles for short) on October 4. Its official publish will boost all exchanges in the world to serve the green development and realize the sustainable development of global economy on one hand, and will urge domestic exchanges to fulfill their social responsibilities and boost the green financial development in China on the other hand. Wu Qing, the then Chairman of the WFE Board of Directors and Vice Mayor of Shanghai, put forward the plan of “formulating the ‘Principles for Sustainable Exchanges’” at the WFE Board of Directors Meeting in January this year. Afterwards, the Shanghai Stock Exchange (SSE), as a chair member of the WFE, has taken the lead in formulating the Principles and set up a team with 5 WFE members (Brasil Bolsa Balcao, Luxembourg Stock Exchange, Bombay Stock Exchange, Bolsa de Comercio de Santiago and Borsa Istanbul) to implement the formulation task.
Constructing the basic principles and framework of an industry is the precondition for the future sustainable development. The Principles are based on the framework of the “Roadmap for A Sustainable Financial System” by the UN Environment Program and the World Bank and clearly demonstrate the following five principles that exchanges should observe. First, exchanges will work to educate market participants in terms of sustainability; second, exchanges will effectively improve the convenience for investors to get information about ESG (Environment, Social Responsibility and Corporate Governance, which is a fundamental for investment in social responsibility and a major component of the green financial system) that helps to make investment decisions; third, exchanges will actively engage with regulators and policy makers to advance the sustainable finance plan; fourthly, exchanges will continuously provide relevant markets and products to support the further growth of the sustainable finance; fifthly, exchanges will establish effective internal governance and operational processes and policies to support the sustainability initiative.
The SSE has always paid great attention to sustainable development. It is the first exchange in China that joins the UN Sustainable Stock Exchange Initiative and has taken part in relevant work items as an observer of the international “Green Bond Principles” and a member of the Chinese Financial Team at the Sino-British Financial Summit. The SSE undertook a leading role in formulating the Principles this time, which has actively responded to the General Secretary Xi Jinping’s requirement on green development and implemented the China Securities Regulatory Commission’s instruction of encouraging stock exchanges to actively take part in the international exchange and cooperation in green finance, and it has also set a good example of participating in the governance of international capital industry by a Chinese exchange.
“Rome was not built in one day.” In the future, the SSE will continue to implement the green development concept in the “13th Five-Year Plan” and the requirements of the Principles, further improve the sustainable information disclosure framework of Chinese listed companies, enrich financial products to meet diversified sustainable investment demands, guide the capital to enter into the track of green transformation development, and cultivate the long-term sustainable investment idea of investors, so as to build an industry-leading and world-class stock exchange with sustainable development.
