Stock Exchanges Green the World
Nasdaq, Inc.
Stock exchanges are an important part of the capital markets because they serve as a regulated venue for buyers and sellers to trade securities and provide companies with access to capital. However, Nasdaq has recently expanded its traditional role through market initiatives that promote a greener world.
Fredrik Ekström, President of Nasdaq Stockholm, and Adam Kostyál, Nasdaq's Head of European Listings, spoke about Nasdaq initiatives aimed at achieving net-zero emissions at the 2022 Almedalen conference in Sweden.
"We are assisting in the financing of the Green Transition," Ekström explained.
Almedalen, founded in 1968, is a one-of-a-kind forum where stakeholders from business, politics, academia, and civil society come together to discuss today's opportunities and challenges. The following are some of the most important takeaways from the event.
Stock exchanges connect environmentally conscious investors with sustainable businesses.
According to Kostyál, the last ten years have seen a significant increase in climate-conscious investment, with "companies today both seeing and counting on value in sustainable investments."
Nasdaq created Green Designations, which highlight companies that follow strict environmental guidelines, to help eco-conscious investors connect with authentic, environmentally-minded companies.
The criteria for the designations are divided into two categories: [Insert RIGHT, Nasdaq Green Labels]
Companies seeking Nasdaq Green Equity Designation must meet the following criteria:
More than half of their revenue comes from environmentally friendly business activities.
More than half of their investments are allocated to green activities.
Less than 5% of revenue is generated by fossil fuel activities.
Companies seeking Nasdaq Green Equity Transition Designation must meet the following criteria:
More than half of their investments are allocated to green activities.
Less than half of their revenue is generated by fossil fuel activities.
"It is critical that people who choose to invest in companies listed on Nasdaq Stockholm make well-informed decisions based on transparency," Ekström added.
Our company's participation in Nasdaq Green Designations is growing, with our first-ever "Green IPO" scheduled for the end of 2021. The re-fashion website Rebelle (BELLE) went public with the Nasdaq Green Designation label. When the company first entered the market, it already had the tools necessary to attract environmentally conscious investors.
"By highlighting which publicly traded companies are leading the way in the transition, we make it easier for investors to put their money to work for sustainability," Kostyál explained.
Companies require capital to scale up sustainable businesses and initiatives.
Kostyál emphasised the growing trend toward ESG-related investments throughout the conference.
Closing Bell - American Chamber of Commerce | Adam Kostyál, Nasdaq's Head of European Listings
"Increasingly, we see money invested in stocks going toward companies that are considered pioneers in Environmental, Social, and Governance (ESG)," Kostyál said.
However, ESG initiatives come at a cost for businesses seeking to transition to cleaner energy, invest in their own human capital, or scale their sustainable business.
Nasdaq established the first and largest Sustainable Bond Market to assist all companies on the exchange in raising capital to meet their ambitious ESG goals. The market allows companies to raise debt capital for investments with clear environmental benefits by offering four types of sustainability bonds: Green Bonds, Sustainability Bonds, Social Bonds, and Sustainability-linked bonds.
As the intermediary between companies and investors, Nasdaq established the Nasdaq Sustainable Bond Network, which connects issuers and investors, enabling them to assess impact and make informed investment decisions in sustainable bonds.
The bond market has seen a wide range of participation since its inception, including the city of Helsingborg, Sweden, which listed a sustainability-linked bond as part of its efforts to achieve net-zero emissions by 2035.
A Carbon Removal Market Could Hasten the Transition to a Greener World
In the same way that exchanges facilitate the green transition by raising capital, their role as a meeting place for companies and investors to raise capital can actively foster it. Puro.earth, the world's first marketplace for industrial carbon removal instruments, offers a verifiable and tradable market via an open, online platform.
Some of the world's leading corporations, including Microsoft, already use the platform to remove carbon emissions (MSFT).
Nasdaq aims to be an active part of the climate solution with the acquisition of Puro.earth, the establishment of the world's first and largest market for sustainable bonds, and the creation of a green designations label that connects climate-conscious investors to more sustainable companies.
Nasdaq will continue to make it easier for the financial services industry to be a part of the solution in the future.
"We make sure everyone can participate in the green transition," Ekström said.
Sourse: nasdaq news
