London Stock Exchange Group plc (LSEG) announced today a series of climate initiatives, including becoming the first global exchange group to commit to net zero through the Business Ambition for 1.5°, and joining the United Nations Climate Change ‘Race to Zero’. The group also announced the launch of a dedicated Transition Bond Segment.
Race to Zero was founded in June 2020 by an alliance of businesses, municipalities, investors, and academic and other institutions, in a global campaign committed to achieving net zero emissions by 2050, inline with the scientific consensus on limiting global warming to 1.5 degrees Celsius.
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.”
LSEG has set a series of climate commitments, which have been approved by the Science Based Targets initiative (SBTi). The group’s climate goals include reductions in absolute Scope 1, 2 and 3(business travel) GHG emissions 46% by 2030 from a 2019 base year. LSEG has also set a target of engaging with all key suppliers, accounting for 57% of Scope 3 emissions, to set science-based targets by 2025. In addition, the group stated that it not only encourages issuers to report against TCFD through its reporting guidance but aims to go further each year in embedding these standards into its own financial reporting.
The new Transition Bond Segment, the first to be launched by a global exchange, 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.
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.”