Corporate social responsibility and sustainability have become hot topics in financial sector, as every other sector. In particular, the increase in the number and in the expectations of the investors who are sensitive to these issues, have been essential in raising awareness among both companies and regulators.
Exchanges have a big and leading role in promoting sustainability in finance. An increasing number of them are developing projects related to this subject.
The sustainability strategies of World Federation of Exchanges (WFE) member exchanges are classified into three general categories:
1) To create awareness in listed companies on the environment, social responsibility, and corporate governance issues
2) To calculate sustainability indices, to educate investors and to create sustainable products
3) To set up specialized markets for specific ESG-compliant investment instruments
In relation to the first category, Borsa Istanbul Sustainability Guide for Companies (in Turkish) was first published in 2014 and updated in 2020. The guide provides companies a roadmap on ESG issues.
As to the second category, Borsa İstanbul launched BIST Sustainability Index in 2014. In 2021, the calculation methodology has been revised. In cooperation with data company Refinitiv, the latter’s ESG ratings are now being used to calculate the index. Thanks to this modification, more and more companies are able to be part of the index. Again in 2021, Sustainability Participation Index has been launched as a second sustainability-themed index. It more appeals to the investors who are sensitive to interest rate.
In relation to the third category, Guidelines for Green Debt Instruments, Sustainable Debt Instruments, Green Lease Certificates, Sustainable Lease Certificates were published by the regulator, Capital Markets Board of Türkiye. The Guidelines aim to increase the issuance of sustainable debt instruments and lease certificates, reinforce investor confidence, and diversify investment opportunities of the projects that would contribute to sustainable development. Before its publication, a wide range of stakeholders in Turkish capital markets, including Borsa Istanbul, have provided insights into this document.
International Cooperation
WFE Sustainability Working Group is working to identify the role of exchanges in developing a sustainable financial world and, thus, a sustainable community. As a WFE member exchange, Borsa Istanbul is actively contributing to SWG’s efforts.
United Nations Sustainable Stock Exchanges Initiative (SSE) has been established in 2009 to promote sustainability in capital markets and Borsa Istanbul has been one of the first five exchanges that have signed the foundation document at the RIO + 20 Summit in 2012. There are more than 100 member exchanges. Borsa Istanbul and SSE are in close cooperation in different fields.
In order to promote sustainable finance among derivatives exchanges, SSE launched in 2021 another initiative designed for derivatives exchanges. Borsa Istanbul is one of the founders.
The Women’s Empowerment Principles (WEPs) are a set of principles offering guidance to business on how to promote gender equality and women’s empowerment in the workplace, marketplace and community. Established by United Nations Global Compact and UN Women in 2010, the WEPs are informed by international labour and human rights standards and grounded in the recognition that businesses have a stake in, and a responsibility for, gender equality and women’s empowerment. Borsa Istanbul is one of the signatories.
Non-Financial Reporting
As the subject become more and more popular, sustainability-related reports are now widely used.
In addition to its successful projects realized in line with the Sustainable Development Goals put forward by the UN, sustainability-related practices in different areas, social responsibility strategy and how these are integrated into corporate business procedures were made public through Borsa Istanbul Sustainability Reports between the years 2014 and 2016.
Since 2017, no separate sustainability report has been published. ESG performance and goals have been disclosed through annual reports. In these reports written in line with the International Integrated Reporting Framework (<IR Framework>), Borsa İstanbul's sustainable business model and the value it creates for its stakeholders have been explained with an integrated approach. Borsa İstanbul's strategic response to external factors and risks affecting capital markets is described from a long-term perspective, and the activities carried out during the year are presented with a materiality perspective.
Sustainability Committee
Sustainability Committee was established in 2015 with the aim of implementing sustainability practices in a holistic and effective manner, monitoring the sustainability strategy and performance, and integrating sustainability into decision-making mechanisms and business models in Borsa Istanbul. The committee is composed of several departments’ heads and led by an Executive Vice President.
Sustainability Platform
Sustainability Platform has been established under the leadership of Borsa İstanbul. This is an open platform for the actors in financial sector to discuss sustainability-related practices, potential ways of cooperation.
Apart from Borsa İstanbul, NGOs, international organizations and regulatory bodies can become member. Private sector organizations are not authorized to become member, but to attend meetings.
In 2019 and 2020, with the authorization given by the Presidential Office's Investment Environment Improvement Coordination Board, platform members cooperated for the development of sustainable finance in Türkiye. The Sustainability Principles Compliance Outline, a tangible product of these efforts, was published in 2020 by the Capital Markets Board of Türkiye and became a part of national legislation.
For your questions about the platform, you can email to surdurulebilirlik@borsaistanbul.com
