As part of its efforts to promote sustainable finance, the London Stock Exchange (LSE) is introducing a pair of new branding initiatives designed to help investors find sustainable companies.
The LSE has announced the introduction of a new “Green Economy Mark,” which recognizes publicly traded companies that generate at least 50% of their revenues from products and services that contribute to the green economy. The new program applies to firms on both the LSE’s main market and its venture market, AIM.
The underlying methodology for identifying companies that earn the mark incorporates a data model developed by the FTSE Russell to measure “green” revenues.
“As a leading centre of green finance, London Stock Exchange was the first major exchange to launch a dedicated green bond segment and is now the first to introduce a green economy classification for equities,” said Nikhil Rathi, CEO of the London Stock Exchange plc and director of international development at the London Stock Exchange Group.
Additionally, the LSE is expanding its existing “green bond” market segment, which is a way of helping investors identify bonds from “green” issuers, with the addition of new sustainability and social segments to create a new sustainable bond market.
“These new segments further enable investors to distinguish between different types of sustainable bonds, based on independently verified frameworks and use of proceeds,” the LSE said.
“We continue to see growing investor demand for actionable climate related financial information, with global asset allocations to green and sustainable finance increasing each year. The launch of the ‘sustainable bond market’ and the ‘green economy mark’ underline our commitment to finding innovative solutions to support issuers and investors in the transition to a greener economy,” said Rathi.