Nordics

Nordic Stock Exchanges top Most Sustainable List

Stockholm (NordSIP) – Corporate Knights, the Canadian sustainability ranking agency, last month published its sixth annual report on the status of Sustainable Stock Exchanges. “Measuring Sustainability Disclosure – Ranking the World’s Stock Exchanges” measures, as its title indicates, how the world’s stock exchanges rank with regard to sustainability. Nasdaq Helsinki topped the 2017 rankings, followed by Nasdaq Stockholm in second place and Nasdaq Copenhagen in eighth, putting three Nordic stock exchanges in Corporate Knights’ top ten.

Nasdaq Helsinki was the best performing exchange in the world in terms of disclosing sustainability metrics, with over 50% of its large listings communicating all four environmental metrics (greenhouse gases, energy, water and waste). Nasdaq Copenhagen ranked the highest, however, when measured by green revenue percentage, at 4.4% versus Helsinki’s 2.1%. Conversely, Nasdaq Oslo was found to have the highest rate of corporate revenue from ‘brown sources’ (oil and gas, thermal coal and electric utilities using coal for electricity generation), at 44.5%.

The data used to assess the stock exchanges related to the fiscal year 2015. Winning companies succeeded in fulfilling the seven sustainability indicators used for assessment, and also provided timely reporting (only 43% of the companies in the world considered ‘large’ reported their greenhouse gas emissions for 2015, arguably the most heavily tracked corporate environmental performance indicator).

“While it never made sense that investors could succeed in a society or planet that fails, emerging policy and technological drivers have advanced market fundamentals such that investing in a better world now makes sense and makes dollars,” Corporate Knights CEO Toby Heaps said in the report.

The report suggests how disclosure can be translated into actionable key performance indicators to help investors distinguish companies incorporating sustainability into their value creation. It also recommends creating a globally applied sustainability reporting standard to harmonise ESG reporting and obviate conflicting and confusing frameworks. It also calls for regulatory measures to close the gap between the lack of sustainability reporting by companies and investor expectations – recommendations borne out of frustration with the slow global progress in sustainability reporting.

“Unfortunately, the reporting gap is hobbling market feedback loops and gumming up the efficient allocation of capital. This constitutes a glaring governance failure that requires urgent redress,” Heaps added.

Nasdaq exchanges in Reykjavik, Tallinn, Riga and Vilnius were too small to be included.

Image: (c) shutterstock – mills21

Kames Capital
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  1. Pingback: The Week in Green (November 3rd edition) | NordSip

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