The World Federation of Exchanges (WFE), the global body for exchanges and CCPs, announced its industry-wide WFE Green Equity Principles, the first global framework for designating stocks and shares as green, thereby countering greenwashing and supporting the enhanced flow of funding towards more sustainable economies.
The Principles, agreed upon globally by members, bring the industry together with a harmonised definition. They are designed to be a framework, consisting of ‘’WFE Green Criteria for Equities’’ and the ‘’WFE Green Equity Classification.’’ The framework is based on the following five overarching pillars: revenues and investments; use of a taxonomy; governance; assessment; and disclosure.
Nandini Sukumar, chief exec of the WFE, said in a statement: “This is a milestone in sustainable finance. The exchange industry has worked together over the last year to agree on the Principles which are a structured framework. The WFE Green Equity Principles provide a carefully evaluated structure within which exchanges set criteria for issuers and investors to demonstrate their green credentials. Investors should be able to have greater visibility of issuers who have green activities in a way that is rigorous and that counters greenwashing. Exchanges strive to bring clarity, consistency and rigor to the concept of green and to counter greenwashing.”
The WFE Green Equity Principles are the first step within a longer-term roadmap on which the industry has agreed. In subsequent phases, the WFE will publish an accompanying guidance note to the Green Equity Principles. The WFE will then open both to public consultation, seeking wider stakeholder feedback.