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Engaging stock exchanges to drive green finance
07 December 2017

​With the new TCFD recommendations, stock exchanges around the world are considering how to adjust to a future of green finance. GRI co-organized a technical workshop at the Sustainable Stock Exchanges event alongside COP23, on how to use climate information to boost green finance.
​Climate change has a potentially huge impact on companies, and therefore investments. A 2015 report by the Economist Intelligence Unit, as quoted by the TCFD, estimated the climate change-related risk to the total global stock of manageable assets to be $4.2 trillion, and could reach as much as $43 trillion if global temperatures continue to rise.

The Financial Stability Board was set up by the Task Force on Climate-related Financial Disclosures (TCFD) to identify the information needed by investors, lenders and insurance underwriters to understand and work with these risks. The TCFD published its recommendations in June 2017, which are applicable to all organizations across all sectors around the world, suggesting that any organization preparing climate-related financial disclosures provide them within their public annual filings.

The recommendations could have a significant impact on the way companies account for climate change related risk; stock exchanges are key to ensuring the adoption of the TCFD recommendations and driving change to a sustainable financial future. The Sustainable Stock Exchanges Initiative held an event alongside COP23 on 16 November, bringing together the leaders of stock exchanges around the world with ministers of finance, chief capital market regulators, investors and issuers to help chart the path forward for stock exchanges and their contribution to climate goals. The event also saw the launch of the guide How Stock Exchanges can Grow Green Finance

“GRI is an important partner for us in our outreach to stock exchanges on sustainability reporting as a driver for responsible investment,” said Anthony Miller, UNCTAD Coordinator of the Sustainable Stock Exchanges initiative. “Green finance practices are expanding rapidly around the world and as they do there are greater calls for transparency, standardisation and technical assistance.”

At the event, GRI and the Carbon Disclosure Standards Board (CDSB) organized a workshop – The implications of the TCFD Recommendations: Utilizing climate related information to boost green finance – to introduce the leaders of stock exchanges around the world to the TCFD recommendations, evaluating the role of exchanges, reporting standards and frameworks and data integration. GRI’s Eszter Vitorino presented on using the GRI Standards to comply with the TCFD recommendations.

“Stock exchanges are in a unique position to influence transparency around climate-related financial disclosures and can push for more and better reporting, supporting green finance in the future,” said GRI Chief Executive Tim Mohin. “Gathering the world’s stock exchange leaders is a key step towards making this happen and implementing the TCFD recommendations. With global action on climate disclosures, businesses can have a positive impact on a sustainable future economy.”

In March 2017, GRI signed an exchange of letters with the UN Conference on Trade and Development (UNCTAD), deepening their collaboration and establishing a strategic partnership on responsible investment. GRI’s support for the SSE initiative, which is co-organized by UNCTAD, is one example of the work already being done in this area. GRI also engages directly with exchanges to support them in developing guidance; 35 exchanges and market regulators around the world currently reference GRI in their guidance.