Can the London Stock Exchange help stop climate change?

Last month, the London Stock Exchange (LSE) joined the United Nations Sustainable Stock Exchanges initiative. The LSE’s decision to join the UN sustainability initiative is an important one, and has the potential to fight climate change.

The quality of non-financial information disclosed by London listed companies varies greatly. Disclosures by fossil fuel companies is of particular concern, and one where tougher reporting requirements should be put in place. ClientEarth and a number of other campaigners have written to LSE’s chief executive, Xavier Rolet, asking for a meeting to discuss how the LSE can strengthen its sustainability listing rules and integrated reporting requirements.

The London Stock Exchange is one of the most carbon intensive markets in the world. Better disclosure of companies’ exposure to carbon-related risks and the environmental impact of their activities would enable investors, particularly those with longer-term outlooks, to make better investment decisions.

At a time when institutional investors are coming under growing pressure to be responsible stewards of their clients’ assets, improved corporate transparency on environmental, social and corporate governance issues would enable investors to engage more actively with the companies which fall short of the mark.

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