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Euronext Launches ‘First of-its-kind’ Exchange-based ESG Tool

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Europe-wide market provider Euronext is ready to launch a “first of its kind” ESG tool providing comprehensive data, free of charge, to the market.

The company’s My ESG Profile is now available to listed companies, before its public release scheduled mid-November. Issuers are currently in the process of reviewing the data collected by Euronext, and can enrich their profile by adding complementary information about their ESG strategy and performance

Euronext Equity Listing Product Manager Alexandra Jolly said the issuer-focused product builds on Euronext’s track-record of ESG initiatives that provide customers with guidance and educational tools on ESG integration into IPOs as well as reporting guides to help companies manage their regulatory disclosure compliance processes.

“With this initiative, we wanted to go one step further and actually provide our clients with a concrete tool to showcase their efforts.” Jolly told ESG Insight. “We’re doing this because we think that European regulations are providing us with the right standards and convergence towards a common reporting framework and we want to leverage that.”

Exchange Engagement

Euronext’s initiative is the latest expression of a move by exchanges the world over to engage with their issuer and investor clients on ESG and sustainability. These initiatives take place in the context of former Bank of England governor Marc Carney’s statement in 2021 that stock exchanges were “critical market infrastructure” that are essential in helping investors manage sustainability risks and opportunities.

Some trading venues, like SGX in Singapore, have made it mandatory for listed companies to issue sustainability reports, while others, including HXEX in Hong Kong, have signed up to net-zero initiatives such as the Glasgow Financial Alliance for Net Zero (Gfanz).

Canadian market operator TMX Group last week said it had launched an ESG hub to help its international clients integrate ESG in investment decisions. Euronext, however, declared on September 7 to be, the first to display ESG data, free of charge, in a standardised manner on its public website.

Debut Service

Euronext’s My ESG Profile is designed to provide issuers with a channel to communicate about their ESG performance, and boost accessibility to data that companies will be required to disclose under the Corporate Sustainability Reporting Directive (CSRD) from next year.

Around 30 data points per issuer have been collected from documents published by the listed companies, including sustainability reports. These will include scope one, two and three emissions as well as social and governance information. Issuers have permission to amend and supplement that content.

This two-stage process has been created to limit the amount of data retrieval that companies must do, especially because they will be increasingly expected to provide similar data sets to other stakeholders. Profiles will be published online next month after each company has had a chance to review its details.

“We see this as a strength compared to other platforms that provide ESG data, where corporates often are not involved in the process,” said Jolly. “They can end up having estimated data that’s not necessarily representative being distributed on many platforms. With our clients, we really position this as a as a tool over which they have control and that they can use.”

Future Plans

With data gathered on about 2,000 companies, the amount of information that will sit on Euronext’s systems will be large and valuable, Mathieu Caron, Head of Listing and Corporate Services told ESG Insight.

“We have a set of tens of thousands of data points,” Caron said. “That will offer opportunities for us to work with this data later on”.

For the time being, investors who want to use the Euronext data will have to refer to the exchange’s website. Future plans, however, may include feeding that data directly into investors’ own systems and providing analytics on the Euronext platform.

“The first step is to make this data widely available in a standardised format and obviously, we’ll work on enriching this and making it fit with investor needs,” added Jolly.

Euronext expects its new service will also provide a crucial facility for SMEs to gain visibility on their ESG reporting efforts. While CSRD is likely to bring the ESG data of more than 50,000 companies into the public realm, its initial phase focuses mainly on large companies.

“We see a lot of smaller companies that are not yet required to report under CSRD that are already making the effort to publish some ESG data,” Jolly said. “We want to give them additional visibility and reach.”

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