20 June 2022

SSEI: Nearly 70 stock exchanges promoting TCFD – 5 key actions

The database identified five activities that stock exchanges are undertaking in support of the diffusion of reporting practices in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

A new database launched today by UN Sustainable Stock Exchanges (UN SSE) shows that 69 stock exchanges globally are taking actions in support of enhancing climate-related financial disclosures in their markets.  A total of 69 stock exchanges were found to be acting on at least one of the five activities.  The most common action taken by stock exchanges engaging with this topic was adding the TCFD’s recommendations to their ESG reporting guidelines for their markets. While 40 stock exchanges are referencing the TCFD recommendations in their ESG reporting guidelines, three stock exchanges have further provided climate-specific disclosure guidelines (HKEX, JSE and LSEG). The SSE’s Model Guidance on Climate Disclosure makes a case for climate-specific disclosure guidelines given the unique material risks and opportunities that result from climate change.  To enhance efforts aimed at supporting issuers aligning their reporting practices with the TCFD, stock exchanges are also increasingly providing training for their markets. At the time of publication, 33 stock exchanges had arranged training on TCFD-recommended disclosures through a joint-initiative launched by the UN SSE, IFC and CDP to provide CPD certified training on climate-related financial disclosures. The free training was made possible by donor support from IFC and Bloomberg Philanthropies. For more information, visit our TCFD-training page here. 

Key Database Findings (For database methodology visit the database webpage here) - 69 stock exchanges acting to enhance transparency on climate-related risks and opportunities - 1 exchange conducted all five climate transparency activities (LSEG) - 5 exchanges have implemented four of the five activities (Bolsa de Santiago, HKEX, Bursa Malaysia, Singapore Exchange, JSE) - 24 exchanges have only implemented one of the five activities tracked - 7 exchanges are TCFD Supporters, but have not implemented any other activities to support climate-related disclosure in their market - 11 exchanges have made use of the TCFD recommendations for their own disclosure practices, but are not yet official TCFD Supporters In addition to guiding their market on how to disclose climate-related information in their annual reporting package for investors, 36 stock exchanges are official TCFD supporters and 30 stock exchanges have aligned their own disclosure practices to the TCFD. Of those exchanges that support the TCFD by becoming official supporters, seven have not yet implemented additional activities such as guidance or training. Contrarily, 11 stock exchanges have started to use the TCFD recommendations for their own reporting practices, but have not yet publicly become formal “TCFD supporters” (which can be done on the TCFD website here).  While many exchanges are just starting out on this topic, with 24 of the 69 exchanges only engaging on one of the five activities, there are five exchanges that have already initiated four of the five activities, and one exchange that has all five activities underway. The SSE congratulates the London Stock Exchange Group for its leadership having achieved all five activities and encourages all exchanges to continue to develop their engagement on climate-related activities for the achievement of the Paris Agreement. 

How to get started - 5 steps to support the TCFD recommendations The UN SSE provides a number of resources that exchanges can use to engage on climate. Exchanges that want to further enhance their support for climate-related disclosures in their markets are encouraged to do the following: 

1. Reference the TCFD in ESG guidance: Exchanges that have already published guidance on ESG disclosure may want to consider adding details on the TCFD recommended disclosures. Already, 40 stock exchanges have included the TCFD recommendations in the ESG guidelines for their markets. The SSE’s  ESG Disclosure Guidance Database provides a list of all stock exchange guidance documents that have a TCFD reference. Exchanges that have not yet developed guidance on ESG disclosure, can make use of the SSE's Model Guidance on ESG Disclosure. 
2. Publish climate-specific disclosure guidance: Some stock exchanges have begun to publish stand alone guidance, specifically for climate-related disclosures. One of the most significant, and perhaps most misunderstood, risks that organizations face today is climate, leading investors as well as regulatory authorities to request enhanced transparency on how organizations are considering the specific risks pertaining to climate. To help stock exchanges develop guidance specifically on this topic, the SSE published the Model Guidance on Climate Disclosures. Exchanges can make use of this guidance document as a template for their own climate-related disclosure guidelines. 
3. Host TCFD training: The SSE launched an online training program together with IFC and CDP to help stock exchanges educate their markets on climate-related disclosures. Thanks to the financial support from IFC and Bloomberg Philanthropies, this training program has been provided free of charge to over 30 markets, reaching over 8,000 participants. This training program encompasses two online training sessions (2 hours each) and a self-guided online platform for further training on specific aspects. The training program is CPD (Continuing Professional Development) certified, and participants receive a certificate upon completion. Exchanges that wish to host this free CPD certified training for their markets can find out more information here and contact the SSE team to book. 
4. Use the TCFD recommendations: In addition to supporting markets on disclosing climate-related information and considering climate-related risks and opportunities, stock exchanges are encouraged to lead by example. Now 30 exchanges have started their own journey towards alignment with the TCFD recommended disclosures. Exchanges are recommended to start with the SSE’s Action Plan to Make Markets Climate Resilient, which provides tailored guidance on the TCFD for stock exchanges.
5. Become a TCFD Supporter: Exchanges that would like to show their support for the TCFD recommendations (you can find the recommendations here), can fill in this online form. By filling in this form, an exchange indicates that the exchange is in support of disclosure of climate-related financial information in alignment with the recommended disclosures of the Financial Stability Board (FSB). Currently, there are 36 stock exchanges that the SSE tracks that have shown their support for the TCFD by filling in this online form. You can find all TCFD Supporters online here and a snapshot and FAQ on becoming a supporter here.
   

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