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NASDAQ Exchange Publishes the "ESG Reporting Guide" for Corporate Managements and Boards There is encouraging news for sustainability professionals coming from the world of stock exchanges this month. The NASDAQ Exchange just published its guide for listed companies – as well for privately-owned firms as perhaps future IPOs for NASDAQ listing – for companies’ public ESG reporting. This is the “ESG Reporting Guide – A Voluntary Support Program for Companies”. The pilot program for the guide effort got underway with NASDAQ’s Nordic and Baltic markets in 2017; the May 2019 guide includes third party reporting methodologies for company leaders’ education. The recommendations are “completely voluntary” for companies, the exchange emphasizes. Evan Harvey is the Global Head of Sustainability for NASDAQ and key player in development of the guide. As the corporate ESG reporting pace continues to increase in both volume and velocity, company boards and managements do need more guidance on evolving ESG / sustainability standards and frameworks that could be used [for their increased disclosure and structured reports such as those published annually or periodically for their investors]. These frameworks, NASDAQ explains, include the Global Reporting Initiative Standards, (GRI); the standards of the Sustainable Accounting Standards Board for 79 industries; the TCFD recommendations (the work of the FSB’s Task Force on Climate-Related for Financial Disclosures); and (as example) the guidance and frameworks for industry reporting such as GRESB for the real estate industry. Note: G&A Institute is the Data Partner for the GRI in the U.S.A., U.K. and Republic of Ireland. The NASDAQ guide developed along the lines of such ESG / sustainability reporting “being voluntary” by private sector companies underscores that we are yet not quite at the “order to publish” from the United States stock exchanges. Halfway ‘round the world, the Hong Kong and Singapore stock exchanges set the pace with such listed company rules. In Hong Kong, listed companies must “comply or explain” for their ESG reporting; in Singapore, the rule is to publish the annual corporate sustainability report after 1/1/17 – also on comply or explain basis. And in Europe, companies larger than certain market caps and employee counts must report on their CR activities; (“The European Directive of Non-Financial and Diversity Information by Certain Large Companies”, part of the EU’s Initiative of CSR.) Getting to a “listed rule requirement” that exchange-listed companies publish an annual or more frequent corporate sustainability report is a heavy lift in the U.S. capital markets, which typically reflect the direction of the political winds in Washington DC. Right now, the chair of the SEC – the regulator of both the stock exchanges and publicly-traded companies – is a Republican and two other members of the five-member Commission are “Rs”. Their party’s leader in the White House is busily dismantling environmental protection and other rules and pulling the U.S. out of the historic Paris Agreement on climate change. Background: The regulatory activities of the stock exchanges based in the United States are governed by statutes passed by the U.S. Congress (such as the Securities Act of 1933 and Exchange Act of 1934) and the stock exchanges therefore by federal law are designated as non-governmental “self-regulating organizations” or SROs. As SROs, the New York Stock Exchange and NASDAQ Exchange have authority to establish rules and regulations and set standards for companies (“issuers”) whose stock is listed for trading on their exchange. Of course, the views of the listed company leaders and other stakeholders are considered when rules are being developed. Proposed listing company or brokerage (“member”) rules are filed with the Securities & Exchange Commission (created by that 1934 law) to oversee and regulate certain activities. And so, the proposed rules for listed companies, brokerage firms and other entities are filed with SEC and public comment invited before SEC approval and then the exchange’s official adoption of the Rule. A recent NASDAQ SEC filing example is: “Notice of Filing of Proposed Rule to Adopt Additional Requirements for Listings in Connection with an Offering Under Regulation A of the Securities Act” in April 2019. Should the U.S. exchanges adopt rules requiring corporate ESG reporting? Could they? Will they? Will SEC review and approve such rules for exchange-listed firms? These are important questions for our times. Of course, many people are “Staying Tuned!” An important P.S.: The 1934 Act also ordered publicly traded companies to file annual and other periodic reports. In the 1970s, the NYSE listing rules required listed companies to begin publishing quarterly reports; some of the listed companies reacted with great alarm. But shortly afterward the SEC made this a requirement for all listed companies. And so the familiar 10-K, 10-Q etc. This extends to non-US companies raising capital in the U.S. such as listing their securities on an American exchange. Click here to find out more about Hong Kong and Singapore exchange rules. NASDAQ, NYSE, Hong Kong, Singapore – all are participating in the World Federation of Stock Exchanges (WFE) Principles to exert leadership in promoting a sustainable finance agenda. Those principles are explained in the report here. This Week's Top Stories Nasdaq Launches Global Environmental, Social And Governance (ESG) Reporting Guide For Companies More information is available at: https://business.nasdaq.com/esg-guide Global Sustainability: Continuing Forward Momentum! This Sustainable Technology Could Save America's Dairy Farms The sustainable pioneers Got a Good Sustainability Record? Get Better Finance Rates A five-step approach to engaging investors on sustainability 10 questions for Walmart's sustainable fleet leader Smithfield Foods Showcases Continued Leadership and Transparency in New Sustainability Report, Launches Unique Tool for Today’s Conscious Consumer 4 reasons businesses should set sustainable packaging goals Generation closes $1B growth fund targeting sustainable startups The Future Of Sustainability For The Industries That Power Online Shopping, Explained What is sustainable rubber? 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How Chase and The Big Banks Undermine Climate Action What did Huawei do to land in such hot water with the US? Top Reason for CEO Departures Among Largest Companies Is Now Misconduct, Study Finds Climate change: Global sea level rise could be bigger than expected Revealed: 1.6m Americans live near the most polluting incinerators in the US
Whole Foods eliminating plastic straws from US stores in July. Expect new chicken, too. Little Caesars is the first national pizza chain to jump on the vegan meat bandwagon Del Monte settles with EPA after 2016 ammonia release Jack in the Box has a minimum-wage problem | NEW G&A INSTITUTE
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The Sustainability Highlights eNewsletter is prepared by Governance & Accountability Institute, Inc. based on continuous monitoring of trends and developments in Sustainability and ESG. Governance & Accountability Instiute is the "Sustainability Headquarters™" for clients in the corporate, investment, public and social sectors. Based in New York, G&A is a for-profit consulting organization providing a range of value-added strategies, services and resources related to ESG & sustainability to clients in the corporate and capital markets communities.For G&A's full range of services, click on each of the links below: For more information, contact Governance & Accountability Institute, Inc. (New York, New York) | |||||||||||||||
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