A stock exchange floor in Viet Nam. A Ha Noi Stock Exchange plan is expected to have a positive impact on enhancing the quality of listed companies and making domestic securities market more sustainable and attractive to global invetors. — Photo

HA NOI (Biz Hub) — The Ha Noi Stock Exchange has unveiled a plan to build and issue guidance to listed companies on environmental, social and governance (ESG) disclosures next year.

This move comes in response to a call by the United Nations Sustainable Stock Exchanges (SSE) initiative of which the Vietnamese exchange is a member.

"With reference to the SSE's model reporting guidance, we intend to introduce a road map for application of our own customised market guidance on ESG reporting for listed companies in 2016," the exchange said in a statement.

The exchange said the guidance would have a positive impact on enhancing the quality of listed companies and making the domestic securities market more sustainable and attractive to global investors.

Different investors have different information needs, but the financial community has admitted there is a growing level of consistency in incorporating material ESG factors into investment decision-making.

"Investors increasingly incorporate ESG considerations in the investment process," Mark Makepeace, CEO of FTSE Russell London Stock Exchange Group, said. He said companies that incorporated ESG factors into their company's strategy and daily operations would have better access to capital.

In a survey by SSE of more than 1,000 corporate CEO worldwide, 93 per cent said they considered sustainability important to the future success of their business.

However, these CEO said these efforts were constrained by a number of factors, including the failure of markets to adequately price social and environmental costs. Thus, investors do not have adequate information by which to make their investment decisions.

The SSE's campaign to have all exchanges provide companies guidance on reporting ESG information by the end of 2016 has been welcomed enthusiastically. Seven exchanges, such as the HCM Stock Exchange and the Ha Noi Stock Exchange, made public commitments. In addition to the planning of the guidance, the Ha Noi Exchange said it has been promoting activities aimed at sustainable development of the capital markets, including building a transparent and friendly business environment, sustainable corporate development and wise investors. — VNS