LSEG Launches Transition Bond Segment02.16.2021
- LSEG has committed to ambitious, SBTi-aligned climate targets designed to limit global temperature rise to 1.5°
- LSEG will become a member of United Nations Climate Change ‘Race to Zero’ – first global exchange group to commit to net zero
- LSEG is well positioned to support the transition to the green economy for issuers and investors
- London Stock Exchange launches new Transition Bond Segment within its Sustainable Bond Market, supporting issuers with a robust and credible transition strategy aligned to the Paris Agreement
LSEG (London Stock Exchange Group plc) today announces that it has become the first global exchange group to commit to net zero through the Business Ambition for 1.5° and hence becomes a member of the United Nations Climate Change ‘Race to Zero’. The Group’s science-based targets to reduce emissions in alignment with the Paris Agreement have also been approved by the Science Based Targets initiative (SBTi).
LSEG commits to reducing its emissions by almost 50% by 2030 and will engage all key suppliers, to set science-based Scope 3 emissions targets by 2025 (1). LSEG has also been a supporter of the Task Force for Climate-related Financial Disclosures (TCFD) since its launch in 2017. LSEG not only encourages issuers to report against TCFD through our reporting guidance but aims to go further each year in embedding these standards into our own financial reporting.
Delighted to announce that @LSEGplc has become the first global exchange group to commit to net zero through the Business Ambition for 1.5C and hence becomes a member of the UN Climate Change ‘Race to Zero’. Read more here https://t.co/DgllkK3Ouk pic.twitter.com/IetLnmTwdw
— LSEG – (London Stock Exchange Group) (@LSEGplc) February 16, 2021
Climate risks pose threats to ecosystems, societies, markets and to companies and a globally coordinated response is needed to mitigate and manage those risks. LSEG is committed to taking action, supporting the growing drive to a net-zero carbon economy. LSEG is well positioned at the heart of global financial markets to act as a facilitator, bringing together investors and issuers in three critical areas:
- Data and disclosure – catalysing consistent, comparable and reliable global climate data
- Growth of the green economy – enabling the growth and development of green industries
- Climate transition across all sectors – supporting investment and capital flows to achieve climate transition and resilience
David Schwimmer, Chief Executive Officer, LSEG:
“Financial markets infrastructure plays a core role in enabling the transition to a net-zero economy. The focus on incorporating sustainable investment strategies has only increased during the Covid-19 pandemic and LSEG is committed to playing a leading role. As part of our own commitment, LSEG is delighted to become a member of United Nations Climate Change ‘Race to Zero’, the first global exchange group to do so.”
Nigel Topping, UK High-Level Actions Champion for Cop26, UK Government said:
“To achieve net-zero emissions requires transformation across the economy. LSEG with its data and analytics, post-trade and exchange businesses sits at the centre of capital markets which is why today’s announcement is so powerful. Not only is LSEG committing to net zero in its own operations and supply chain but critically is committing to playing its role in the transition to net zero of the marketplace through its influence with investors and issuers.
“I welcome LSEG as the first exchange to commit to net zero and I look forward to following LSEG’s progress as it moves forward with these commitments to help catalyse and finance market-wide decarbonisation, including through their new transition bond segment.”
.@LSEplc will this week become the first exchange to launch a dedicated Transition Bond Segment. Part of our #SBM, it will display debt instruments from issuers with a corporate strategy or transition framework aligned to the Paris Agreement https://t.co/sdkGIx3kpd pic.twitter.com/0l3ZidWnZA
— LSEG – (London Stock Exchange Group) (@LSEGplc) February 16, 2021
New Transition Bond Segment
As part of our efforts to drive action on climate change, London Stock Exchange will this week become the first exchange to launch a dedicated Transition Bond Segment. The segment will display debt instruments from issuers who have a corporate strategy or transition framework that is aligned to the Paris Agreement, including approved targets to achieve net zero, and discloses, manages and addresses climate-related risks in line with global standards such as the Climate Transition Finance Handbook, the CBI Transition Certification Framework and the Transition Pathway Initiative.
The new segment joins Green, Social, Sustainability, Sustainability-Linked and Green revenues bond segments to form London Stock Exchange’s Sustainable Bond Market (SBM). It has been developed following consultation with issuers, investors and advisors, and with input from our Sustainable Bond Market Advisory Group. Find out more here.
In Data and Disclosure, LSEG is now co-chairing the UN Sustainable Stock Exchange’s advisory group developing Model Climate Reporting Guidance to be launched later in 2021. To Grow the Green Economy, London Stock Exchange’s Green Economy Mark recognises listed companies with 50% or more of their revenues derived from products and services that contribute to the global green economy, as defined by FTSE Russell’s Green Revenues 2.0 Data Model. London Stock Exchange’s Sustainable Bond Market allows for Green Economy issuers with over 90% of green revenues to display their bonds on a dedicated green revenues segment.
In Data & Analytics, FTSE Russell is helping investors calibrate indices to their requirements to achieve climate and other environmental, social and governance goals. To support Climate Transition, the FTSE TPI Climate Transition Index, which was launched in early 2020, was the first global index to enable investors to align a broad equity portfolio with climate transition and the goals of the Paris Agreement. Refinitiv has been delivering ESG data and solutions for over 15 years and offers one of the richest ESG databases in the industry – a fully transparent resource for investors and corporates to drive positive impact and provide comprehensive analysis. This now includes Lipper fund and portfolio ESG scores, sustainable financing deals, carbon pricing data and research from Point Carbon, renewable energy projects through Infrastructure 360.
Separately, Don Robert, Chair of LSEG, has been appointed as a supporting Chair of Chapter Zero, a network for non-executive directors that enables its members to discuss the risks and opportunities of climate change in the boardroom and further net zero plans with their businesses. With 1,000+ members, Chapter Zero hosts expert-led events, workshops and webinars to inform, exchange ideas, share experiences and facilitate co-operation. They also provide toolkits and resources that actively support conversations on climate risk, opportunity and business strategy.
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