In order to promote effective internal governance, operational processes and policies in capital markets across the globe, including Nigeria, the World Federation of Exchanges (WFE), the global industry group for exchanges, has partnered with the United Nations Sustainable Stock Exchanges (SSE) initiative.
The initiative is to define ‘How exchanges can embed sustainability within their operations: a blueprint to advance action.’
Recall that in October 2018, the WFE launched its 5 Sustainability Principles which constitute a formal declaration by the WFE and its membership to take on a leadership role in promoting the sustainable finance agenda.
In a statement made available to the public, the blueprint addresses WFE Sustainability Principle 5 which encourages exchanges to establish effective internal governance and operational processes and policies to support their sustainability efforts.
The statement read, “Whilst the first four Principles are market-facing commitments, the fifth addresses exchanges’ internal aspects only. Indeed, the blueprint is a practical guidance document, aimed at assisting exchanges in translating the WFE’s fifth Sustainability Principle into concrete actions, guiding them towards embedding sustainability into their own exchange operations.
“Today’s blueprint highlights four focus areas where exchanges can implement recommended practices and actions to ensure that sustainability becomes integrated across the business. The recommendations and sequencing are not prescriptive and both the WFE and SSE note that each exchange will have its own pace and direction of sustainability integration.
“The integration of sustainability into an exchange’s strategy and business plan should occur at the outset of the strategy development process and form part of its vision and mission. Exchanges should be able to leverage existing sustainability management resources to identify and manage the impact of their own operations on the environment and society. The exchange should develop policies, processes and procedures to address these operational priorities, which should be monitored and evaluated to track progress.”
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Why this matters: Stock Exchanges provide organised market for an individual as well as institutional investors. They regulate trading transactions with proper rules and regulations in order to ensure investors’ protection.
Consequently, the partnership between the WFE and SSE will facilitate effective, entrepreneurial and prudent management that can deliver the long-term success of individual and institutional investors.