The World Federation of Exchanges has announced its Green Equity Principles, the first global framework for designating stocks and shares as green.

The Principles, agreed upon globally by members, bring the industry together with a harmonised definition 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 pillars:

• Revenues/investments
• Use of a taxonomy
• Governance
• Assessment
• Disclosure

The WFE says the Green Equity Principles enable exchanges to promote improved access to capital by issuers whose activities are primarily green and provide investors with additional information on green activities to aid their capital allocation decisions. They also enable issuers to raise their profiles among investors, increase visibility of their green credentials and mitigate against greenwashing.

Nandini Sukumar, Chief Executive Officer of the WFE, said: “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 rigour to the concept of green and to counter greenwashing.”

You can read the WFE Green Equity Principles in full here.

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