Ceres’ Investor Network on Climate Risk (which shares many members with CII) spearheaded the consultation with investors in the spring of 2013, and this lead to a proposal incorporating the feedback of over 100 institutional investors from six continents. That includes feedback from a lot of big US investors, like CalPERS, CalSTRS, NYC Comptroller, NY State Comptroller, FL SBA, and major asset managers like BlackRock. This week, we have submitted that proposal to the world’s exchanges—members of the World Federation of Exchanges (WFE)—and asked them to comment on the proposal during their own consultation, which runs through mid-summer. Exchange feedback to the proposal will be collected by the WFE, and sent to its newly formed Sustainability Working Group (which just launched yesterday). This Working Group will then discuss and propose a set of recommendations for the entire exchange community, based on this proposal, additional research the Group undertakes, and discussion of the major ESG reporting frameworks that exist today. Those recommendations may initially be a listing requirement that it asks all markets to implement at the local level. It could also be a mix of guidance, rules, and trainings for issuers. The next 6 months will be crucial to what is developed.

Also, yesterday, CII hosted a webinar on the topic of Sustainable Exchanges. An audio recording of yesterday's call is available for playback by clicking here (CII login required): http://www.cii.org/calendar_day.asp?date=3/25/2014&event=89 .

Clearly, a lot is happening on this topic. Issuers have contacted me asking if there will be a separate comment period for them (relevant to corporate pensions within CII). We have been encouraging each exchange to oversee that, and spend the next few months reaching out to issuers in each market and gathering their feedback before submitting comments. For US issuers, please take a look at the proposal and weigh in with NASDAQ or NYSE (if that’s your listing venue). The beauty of this strategy is that we are attempting to get ALL exchanges at one time to agree on a minimal standard for reporting (to the ability they are able to do so), so that all companies are compelled to report on ESG issues, so no one company is at a disadvantage for doing so. And this lessens exchange arbitrage around sustainability matters (think Alibaba in the news of late shopping around for a listing venue).

Tracey Rembert