São Paulo – Last Monday (18th), the stock exchanges of São Paulo (Bovespa), Egypt, Istanbul (Turkey), Johannesburg (South Africa) and the United States (Nasdaq) signed a pledge to promote sustainable investment during the third Sustainable Stock Exchanges 2012 Global Dialogue, held in the sidelines of the Rio+20 Summit.
According to information disclosed this Tuesday (19th) by the United Nations’ Conference for Trade and Development (Unctad), which originated the initiative alongside three other UN agencies, the stock exchanges signed the following statement: “We voluntarily commit, through dialogue with investors, companies and regulators, to promoting long term sustainable investment and improved environmental, social and corporate governance disclosure and performance among companies listed on our exchange.”
To the director for Sustainability at BM&FBovespa, the holding company which controls the Brazilian stock exchange, Sônia Savaretto, sustainable investment is the type that does not consider financial issues alone. “The decision-making process also considers social and environmental variables,” said she, who attended the event. “It means looking at investment in a more wholesome fashion,” she added.
The five signatories, according to the Unctad, have a combined 4,600 listed companies. The pledge is a part of the Sustainable Stock Exchanges (SSE) initiative, and according to Savaretto, BM&FBovespa has championed the UN’s principles in this respect for at least three years now.
Actions developed by the São Paulo Stock Exchange to this end include the “Em boa companhia” (In good company) programme, which sets out to spread sustainable investment practices among companies, and includes onsite debates, a website, and a sustainable investment guide; working to show companies “how much this agenda is a priority to investors;” working with capital market associations to promote sustainable investment; and offering services via the stock exchange itself, such as sustainability indexes, which comprise shares of companies which adopt sustainable practices.
According to the executive, the work is more than just having companies adopt eco-efficient practices such as lowering energy consumption and recycling materials. It consists of positioning the notion of sustainability at the core of business. Banks, for instance, adopt social criteria in order to dole out financing. “In-company work is key, to raise awareness among employees,” she said.
To Savaretto, the main role of the pledge signed in Rio is to provide visibility to the subject, and convince other stock exchanges around the world to adopt these practices. The SSE also comprises the Finance Initiative of the United Nations Environmental Programme (UNEP-FI), the United Nations Princicles for Responsible Investment (PRI) and the United Nations Global Compact (UNGC).
According to the Unctad, the inclusion of a clause covering corporate sustainability reports into the final document of the Rio+20 Summit is under discussion. This year, Bovespa surveyed its listed companies on the matter for the first time. The survey showed that 21.43% of the enterprises publish sustainability reports, 23.88% do not, but explained why and 54.69% did not answer.
Savaretto believes that within two years, no listed company will fail to publish sustainability reports, because the difference between those who care and those who are unaccountable will become increasingly clear. “Right now, it is to explain [this notion], this is a new agenda, but it has the power to exert positive pressure,” she said. “The goal is to seek transparency,” she said.
*Translated by Gabriel Pomerancblum
