Sustainable Stock Exchanges: Indian Economy
Introduction
Through collaboration with investors, regulators, and corporations, exchanges can promote corporate transparency, according to the peer-to-peer learning platform known as sustainable stock exchanges (SSE). UNCTAD, the UN Global Compact, UNEP FI, and the PRI launched sustainable stock exchanges. It is a UN Partnership Programme.
Background And Prior Events
• In 2004, the UN Global Compact engaged in communication with a number of international stock exchanges.
• As a result, Global Compact and eleven other exchanges made a commitment to sustainable development.
• In order to encourage sustainable investment in emerging economies, the United Nations Conference on Trade and Development (UNCTAD) and the Principles for Responsible Investment (PRI) collaborated with investors, financial information providers, stock exchanges, etc.
• The Sustainable Stock Exchanges concept was born out of the work done by Global Compact, UNCTAD, and PRI.
• In 2009, the first SSE Global Dialogue was launched in New York City.
Introduction To Sustainable Stock Exchanges
• Collaboration with investors, businesses, regulators, policymakers, and pertinent international organizations is ensured by this platform.
• It aids in achieving objectives for sustainable development.
• To accomplish its objectives, it performs evidence-based policy analysis.
• It deals with reaching multi-stakeholder consensus and offers technical support and consulting services.
• They give investors a platform to contribute more to global efforts to address environmental, social, and corporate governance challenges.
Sustainable Stock Exchanges: Governance
• The primary oversight body is the governing board.
• An Independent Advisory Committee is present and offers recommendations and input on the work of the Partnership Programme.
• An operational team made up of employees from each of the four Governing Board organizations is also present.
• Additionally, a consultation group with representatives from the Investor Working Group, the Corporate Working Group, and the Regulator Working Group is present.
Functions Provided By Sustainable Stock Exchanges
The following are some ways that Sustainable Stock Exchanges aid in business sustainability promotion:
• Market intermediary: The exchange, which interacts with virtually every other capital market operator, is well-positioned to encourage best practice sharing and collaboration that produces long-term value for issuers and investors.
• ESG (environmental, social, and governance) concerns are gaining significance for this long-term value proposition.
• Financial services pioneer: The exchange has a long history of advising businesses, helping them to follow regulations that maintain stable, open, and fair markets, and helping them to remain ahead of those regulations.
• Naturally, exchanges are crucial in helping markets through the new ESG management and transparency standards.
• The exchange acts as a gatekeeper and advocate, encouraging trust among market participants as well as openness and integrity.
• Enabling dialogue between market participants and addressing disclosure gaps on significant ESG issues are necessary for fostering this trust.
• As a regulator and standard-setter, the exchange develops and offers cutting-edge goods and services in response to investor worries about ESG risks and opportunities as well as issuer requirements for financing growth and development initiatives.
Conclusion
Better last-mile service delivery to the most vulnerable areas will be possible thanks to sustainable stock markets. They will result in more effective resource distribution to social enterprises. Additionally, it will make it possible for investor portfolio diversification.