The London Stock Exchange has launched its Climate Transition Offering for London-listed companies
The exchange writes that it is the first stock exchange to publish climate reporting guidance based on the United Nations Sustainable Stock Exchanges (SSE)’s Model Guidance on Climate Disclosure which is in line with the Taskforce for Climate Related Financial Disclosures (TCFD) recommendations.
London Stock Exchange’s Climate Reporting Guidance is tailored to the UK’s regulatory and policy environment for public companies. The guidance will help companies in London integrate climate risks and opportunities into operational decision making and report carbon performance.
In addition, the London Stock Exchange has introduced Climate Governance Scores for over 400 issuers as a private educational resource to help them understand the key climate metrics that investors are focused on and identify areas of improvement and assess their performance against industry peers.
Based on the Transition Pathway Initiative’s (TPI) Management Quality Score (MQS) methodology, the assessments take into account a company’s carbon management practices and incorporation of climate change considerations into their business strategy. The Climate Governance Score expands the use of the MQS methodology to over 400 Main Market listed companies. The Score assesses the quality of an issuer’s management of climate risks and opportunities. Companies both with and without a predefined score can access an online tool to self-calculate information, understand the methodology and to identify areas for improvement.
Julia Hoggett, CEO, the London Stock Exchange says: “Investors are increasingly choosing to allocate capital to companies with clear frameworks for managing climate-related risks and opportunities. While many FTSE 100 companies have already taken a leadership position by committing to net zero by 2050 and before, the London Stock Exchange is home to companies at varying stages of the climate transition.
“Climate change represents the greatest challenge of our time, and it is essential that the financial market ecosystem supports and stimulates the action necessary across the economy to meet that challenge. Our new Climate Transition Offering launched today will help issuers understand how investor’s view their performance on the transition and facilitate change by providing an action-orientated climate reporting framework aligned with global standards.”
The London Stock Exchange writes that it is a leading global hub for sustainable finance, and has supported investors and issuers in the transition to a low-carbon and sustainable economy for over a decade. Its Sustainable Bond Market (SBM) is home to more than 300 green, social, and sustainability bonds, raising a combined GBP87 billion. In 2021, the SBM expanded to include a dedicated segment for Transition Bonds, to help companies in carbon-intensive industries raise the finance required to transition to lower-carbon operating models. In equity markets, more than 100+ issuers have been recognised by London Stock Exchange’s Green Economy Mark, which identifies London-listed companies and funds that derive more than 50 per cent of their revenues from green products and services.
LSEG is also working with the UN SSE to produce comprehensive education resources including training videos and webinars to help London listed companies understand and implement TCFD.