The World Federation of Exchanges (WFE), a global industry group for exchanges and CCPs, has published a briefing paper setting out human-rights related disclosure practices within stock exchanges.
The briefing notes that while companies have made real progress in achieving a better understanding of their environmental impact and governance standards, social issues have not necessarily been given the same level of attention.
However, the unequal impact of the pandemic has helped to create awareness of and drive momentum behind the need for social change, highlighting issues such as (i) human rights abuses within company supply chains; (ii) the need for gender and ethnic diversity within company boardrooms; and (iii) poor human capital management.
Of the social issues that exist, human rights violations are perhaps seen as the most pervasive and are therefore the focus of this briefing. In particular, the paper takes stock of the following:
* Defining and assessing existing human-rights related initiatives (including the International Labour Organisation (ILO) Declaration on Fundamental Principles and Rights at Work, and the Sustainable Development Goals (SDGs).
* Examining the shift in the ‘purpose of a corporation’ from focussing on value creation for investors to considering the views of wider stakeholders.
* Making a case for Responsible Business (including a consideration of the UN Guiding Principles on Business and Human Rights).
* Setting out the actions taken to give effect to the UN Guiding Principles (including case studies from member exchanges).
* Forthcoming legislation (for example, on supply chain due diligence) and setting out the steps that the WFE can take to help its members with disclosure on human-rights related issues.
Nandini Sukumar, chief executive officer, the WFE said: “The pandemic has helped to shine a light on social inequality. Our members recognise this and see a role for exchanges to play in guiding both issuers and exchanges towards more meaningful disclosure on persistent issues such as human rights abuses. This briefing paper is a welcome first step, and we look forward to working with our members to further develop their understanding and awareness”.
