In March 2017, Nasdaq’s Nordic and Baltic Exchanges issued a framework to support their listed companies to meet ESG disclosure requirements. The guidance has a strong reference to GRI’s sustainability reporting framework, and it reflects the recommendations of the UN Sustainable Stock Exchanges Initiative (SSE), in which GRI is also an active contributor.
The Nordic and Baltic Exchanges in Stockholm, Helsinki, Copenhagen, Iceland, Tallinn, Riga and Vilnius issued a voluntary ESG Reporting Guide to support their companies address critical environmental, social and governance (ESG) related matters.
Many of the companies listed on the Nordic and Baltic exchanges are already eager advocates of sustainability reporting – unsurprisingly, all seven exchanges are part of the UN Sustainable Stock Exchanges (SSE) initiative. GRI has also been actively contributing to the SSE Global and Regional Dialogues, and engages with many exchanges directly to support them develop their own guidance.
Within the SSE initiative, one of the key measures to increase sustainable investment is to enhance sustainability reporting requirements. By encouraging listed companies to measure and publicly report their ESG performance and impacts, stock exchanges can promote better business practices within their capital markets. “ESG data has come of age as a material corporate disclosure with direct implications for the long-term financial health of a company. This new Nasdaq ESG guidance will be an important tool for issuers in their efforts to meet investor demands,” says James Zhan, Lead of the UN World Investment Report and Director of the Investment and Enterprise Division at the UN Conference on Trade and Development (UNCTAD), with whom GRI signed an Exchange of Letters earlier this year.
Recognizing the multiple reporting obligations listed companies already face, the guide will not add to the regulatory burden, but support companies to meet ESG disclosure requirements. Therefore, the guide will reflect the recommendations of the SSE initiative, the World Federation of Exchanges’ Sustainability Working Group and the leading industry standards on ESG reporting, as well as the EU Directive on non-financial and diversity disclosure.
Striving for fair, transparent and efficient markets
As a voluntary initiative, Nasdaq Nordic’s guide is intended to engage, encourage and support listed companies that strive to meet ESG disclosure requirements. “With the publication of this ESG Reporting Guide, Nasdaq Nordic reaffirms its belief in the transformative power of fair, transparent, and efficient markets for all stakeholders to create a more just, sustainable, and inclusive world,” states in his foreword Lauri Rosendahl, President of the Nasdaq Nordic and Nasdaq Stockholm.
Investors are increasingly expressing their need for greater disclosure and transparency from companies. This was also evident in a 2016 study by GRI and RobecoSAM, Defining What Matters, which found that companies are generally good at reporting on their operational performance, but investors are hoping to see more in-depth information. This includes topics of strategic relevance, such as risk exposure, approach to opportunities, sustainability targets and progress towards them.
Similarly, the Nasdaq Nordic ESG guide states that materiality and material business impacts are essential to a proper evaluation of ESG cause and effect. The materiality assessment process and subsequent reporting allows investors to better assess the systemic and longer-term risks that arise from these impacts. The guide refers to the GRI and SASB definitions for a better understanding of the concept.
Moreover, GRI’s sustainability reporting framework is referenced throughout the guide as a recommendation for disclosing versatile non-financial information. The Defining What Matters study also found that the GRI Standards are well placed to form the basis of companies’ sustainability reporting if they want to ensure meeting investor needs.
KEYWORDS: Sustainable Finance & Socially Responsible Investment, Research, Reports & Publications, GRI, global reporting initiative, GRI Standards, Nasdaq Nordic, sustainability reporting, Sustainable Stock Exchanges Initiative, United Nations Conference on Trade and Development (UNCTAD)