Stock exchanges instrumental in attracting investment for sustainable development – UNCTAD

The UN Conference on Trade and Development (UNCTAD) believes that the stock exchange is instrumental in attracting investments to sustain the development of countries.

The UN trade agency sees stock exchanges as an important element of the overall investment landscape.

“Stock exchanges can be instrumental for promoting investment for sustainable development,” said Mr. James Zhan, Director of UNCTAD’s Investment and Enterprise Division.

“Exchanges are an important element of the overall investment landscape,” Mr Zhan said.

Zhan made this known when he met with Mr. Hüseyin Erkan, Secretary General of the World Federation of Exchanges (WFE) to follow up on UNCTAD’s work in the area of responsible investment, and discuss the role of stock exchanges in promoting responsible investment and providing much needed development finance for emerging market economies.

UNCTAD and the WFE met last week (September 5, 2012) in Paris, France to discuss expanded cooperation in the promotion of investment for sustainable development.

In the wake of the financial crisis, both institution say the advantages of transparent, rules based capital markets versus off-market trading and ‘dark pools’ has been made clear.

The WFE has been cooperating with UNCTAD on the Sustainable Stock Exchanges project, a joint initiative coordinated by UNCTAD, the UN Global Compact, the Principles for Responsible Investment, and the UNEP Finance Initiative.

At the Rio+20 meeting in June of this year, leading stock exchanges with over 4,600 listed companies in developed and emerging markets, voluntarily committed to promoting improved environmental, social and governance (ESG) practices.

The WFE is also actively involved in promoting improved ESG practices, as part of a broader effort to address important issues of systemic risk.

A statement issued by UNCTAD said the agency and the WFE discussed collaboration in the area of “sustainable stock exchanges, including a joint publication on the present and future role of stock exchanges in development finance, and the formation of a working group to explore the ways and means of effectively promoting ESG issues via multi-stakeholder dialogue with stock exchanges, institutional investors and capital market regulators.”

The UNCTAD Investment Division’s work with stock exchanges complements its other activities within the overall framework of investment for development, including its recently launched Investment Policy Framework for Sustainable Development.

For more than fifty years, the WFE has represented leading regulated exchanges around the world, including the exchanges of both developed and developing countries.

By Ekow Quandzie

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