Abu Dhabi Securities Exchange (ADX), the region’s leading financial market, signed a Memorandum of Understanding (MoU) with the management consulting firm Sustainability Excellence. The MoU is aimed at deploying Environment, Social and Governance (ESG) -related initiatives that would enable ADX to promote ESG and sustainability values and practices among its listed issuers and investors as well as internally.
Signing the MoU is part of ADX’s strategy to foster a sustainable economy and trading environment and launch initiatives that stimulate the business community to embrace ESG development practices. This will be accomplished by the activation and integration of ESG standards into the strategy of the Exchange and the listed companies. The move will enhance market competitiveness and attract responsible investments to the emirate.
Rashed Al Blooshi, Chief Executive of ADX, affirmed the Exchange’s commitment in developing the local market by adopting sustainability practices that will attract new segments of investors that are keen on sustainable development, and focus on maintaining positive environmental performance, outstanding social responsibility and adherence to corporate governance standards, consequently enhancing liquidity in the markets. Al Blooshi said: “ADX will intensify its efforts in the next phase to promote responsible investment and encourage constructive dialogue between investors and listed companies.”
Al Blooshi added that the signing of the MoU would enhance the market’s ability to achieve its strategy of becoming a sustainable market for securities. The agreement will set a framework for joint action and coordination, identify areas of collaboration and interaction with investors and contribute to the promotion of sustainability in various market events and publications. Additionally, it will build internal capacity and stimulate innovation in digital data.
He continued: “With the support of Sustainability Excellence, ADX will develop the first ESG Reporting Guidance Document in alignment with the recommendations of the United Nations Sustainable Stock Exchanges Initiative (SSE) and the World Federation of Exchanges. Furthermore, we will formulate an investable Sustainability Index and prepare a research report on ESG.”
Commenting on the signing of the MOU between ADX and Sustainability Excellence, Mr. Darin Rovere, Founder and CEO of Sustainability Excellence, added: “Investors’ growing interest in ESG disclosure is fueled by strong evidence of links between ESG and financial performance. We are pleased to support the ADX’s efforts in promoting ESG disclosure among the listed companies and promoting ESG in financial markets.”
In addition, ADX, with assistance from Sustainability Excellence, will hold free quarterly training sessions and interactive workshops with listed companies to apprise them of sustainability issues and their applications, as well as assign them a classification in the sustainability report prepared by the company. ADX will also develop a sustainability strategy and issue a sustainability report based upon it. Furthermore, ‘State-of-Sustainability’ training sessions will be conducted for ADX management and staff, while an online sustainability performance platform will be offered to allow listed companies to benchmark their ESG data.
ADX is committed to implementing Abu Dhabi’s plan to develop the financial services sector, with a view to attracting investments and enhancing the Emirate’s competitiveness in doing business. To achieve this ADX will provide a distinct investment climate and a stable trading environment for investors and listed companies in adherence with best practices and international standards.