Proposed listing rules for public comment
In an effort to drive sustainable investment and development, the Johannesburg Stock Exchange (JSE) aims to expand its current Green Bond Segment by introducing a Sustainability Segment.
This week, the JSE released for public comment, the proposed amendments to its debt listing requirements for the new Sustainability Segment, which will include sustainability instruments under the ICMA (International Capital Market Association) Green Bond principles, Social Bond principles and Sustainability guidelines.
The new segment aims to make it easier to list and trade sustainability-linked instruments, and provides a platform for companies and other institutions to raise funds for sustainable projects.
“As the JSE, we continuously strive to create an enabling environment for our issuers and investors. Our vision is for our Green Bond Segment to evolve into a holistic Sustainability Segment, which will provide companies with an effective tool to raise capital for investments into sustainable projects, and continue in the spirit of making the markets work to support sustainable development. We encourage anyone who is interested to engage with us so that we can do our bit to create fit for purpose instruments which create value for issuers and investors,” says Leila Fourie, Group CEO of the JSE.
This expansion will build on the success of the Green Bonds’ “use of proceeds” model. The expansion will follow established frameworks for Sustainability Bonds and Social Bonds in addition to the current Green Bonds. These instruments will broaden the options available to our investors, and offer applicant issuers the ability to increase their participation in the broader impact and sustainability markets.
The JSE has long championed sustainability. It was the first emerging market and the first stock exchange globally, to introduce a sustainability index in 2004 which measured companies on indicators related to environmental, social and governance practices. It is a signatory to the United Nations-backed Principles for Responsible Investment (a global investor initiative which encourages consideration of environment, society and governance (ESG) in investment decisions), and a founding partner of the Sustainable Stock Exchanges Initiative. The JSE is home to the existing FTSE/JSE Responsible Investment Index and launched the Green Bond Segment in 2017, which is ring-fenced for low carbon initiatives to enable investment in securities that contribute to sustainable development and a low carbon economy.
JSE Group CEO, Leila Fourie currently co-chairs the United Nations’ Global Investors for Sustainable Development Alliance (GISD), which aims to leverage finance and investment know-how, in order to scale up private sector contributions to the circa $2 trillion annual funding gap of the Sustainable Development goals.
The marked-up amendments along with an explanatory memorandum are available on the JSE’swebsite: https://web.jse.co.za/regulation/companies-issuer-regulation. We welcome comments on the amendments to the Debt Listings Requirements which should be submitted by close of business on Wednesday, 18 March 2020 to Alwyn Fouchee at firstname.lastname@example.org.