Stock exchanges contribute to sustainable economic growth and development by both facilitating the allocation of capital and encouraging good corporate governance, says a report published Wednesday from the World Federation of Exchanges (WFE).

The report examines the role of stock exchanges in promoting economic growth and sustainable development.

It was issued by the trade group for stock exchanges and other market infrastructure entities, along with the UN Conference on Trade and Development (UNCTD).

Among other things, the report highlights a couple of the primary mechanisms that enable exchanges to contribute to development, including mobilizing domestic and foreign portfolio flows, and promoting good governance in business practices.

A number of exchanges offer products and services, such as sustainable indices and funds, and green bonds, the report notes, and they also help promote companies that are particularly conscious of sustainability issues. Additionally, exchanges promote enhanced corporate disclosure about sustainability issues, the report says.

“The ability of exchanges to perform these roles is dependent on the existence of a combination of relevant enabling policies, processes and institutional structures,” the report says.

It sets out certain key elements of “a framework to maximize the role of stock exchanges in promoting development…” in proposed guidance.

“Exchanges exist to foster economic development and safeguard the financial system. Well-functioning exchanges enable economic growth and development, and can only do this within an environment that is regulated, secure, transparent and equitable,” syas Nandini Sukumar, CEO of the WFE, in a statement.

“Part of the reason the WFE and UNCTAD did this report is to better understand the specifics of how exchanges contribute to growth. For us, it’s the beginning of a journey. We hope this joint report with UNCTAD serves as a baseline to work towards the creation of more enabling environments globally,” she added.

The report will be the focus of the WFE’s annual meeting, which takes place in Bangkok on Sept. 7 & 8.