How stock exchanges are building a greener world


SStock exchanges are a key component of capital markets, serving as a regulated venue where buyers and sellers trade securities and providing companies with access to capital. But recently, the Nasdaq has expanded its traditional role, thanks to market initiatives that help foster a greener world. At the Almedalen 2022 conference in Sweden, Fredrik Ekström, Chairman of Nasdaq Stockholm, and Adam Kostyál, Head of European Listings of Nasdaq, spoke about Nasdaq initiatives giving direction to net zero emissions.

“We help fund the green transition,” Ekström said.

Conceived in 1968, Almedalen is a unique arena where stakeholders from business, politics, academia and civil society meet to discuss current opportunities and challenges. Below are some key highlights from the event.

Stock exchanges bring environmentally conscious investors to sustainable businesses

The last 10 years have seen a surge in climate-conscious investments, according to Kostyál, who noted that “businesses today are seeing and counting on the value of sustainable investments.”

To help environmentally conscious investors connect with genuine, environmentally conscious companies, Nasdaq has created green designations, highlighting companies that follow strict environmental guidelines, for investors looking to sustainable investments.

Designations have criteria that are divided into two categories: [Insert RIGHT, Nasdaq Green Designations Labels]

Companies with the Nasdaq Green Equity designation require:

  • More than 50% of their revenue comes from business activities that are considered green
  • More than 50% of their investments allocated to activities considered green
  • Less than 5% of revenue from fossil fuel-related activities

Companies with the Nasdaq Green Equity Transition designation require:

  • More than 50% of their investments allocated to activities considered green
  • Less than 50% of their income comes from fossil fuel activities

“It is important that people who choose to invest in Nasdaq Stockholm companies can make informed decisions based on transparency,” Ekström added.

Corporate participation in Nasdaq green designations continues to grow, with our first-ever “green IPO” in late 2021. Rebelle (BELLE), a re-fashion site, went public with the Nasdaq Green Designation label . When the company came to market, it was already equipped with the tools to attract environmentally conscious investors.

“By making visible listed companies that are leading the way in transition, we make it easier for investors to let their money work for sustainability,” Kostyál said.

Companies need capital to scale sustainable businesses and initiatives

Throughout the conference, Kostyál highlighted the growing trend of ESG-related investments.

Closing Bell - American Chamber of Commerce |  Speaker: Adam Kostyál, Head of European Listings, Nasdaq

“Increasingly, we are seeing money invested in the stock market going to companies that are considered pioneers in social environment and governance (ESG),” Kostyál said.

But ESG initiatives come at a cost for companies looking to switch to cleaner energy, invest in their own human capital, or grow their business sustainably.

To help all companies on the stock exchange raise capital to achieve their ambitious ESG goals, Nasdaq has created its Sustainable Bond Market, the first and largest of its kind. With four specific types of sustainability bonds – green bonds, sustainability bonds, social bonds and sustainability-linked bonds – the market enables companies to raise debt capital for investments with clear benefits to the world. environment.

As a connector between companies and investors, Nasdaq also created the Nasdaq Sustainable Bond Network, connecting issuers to investors, enabling them to assess impact and make informed investment decisions on sustainable bonds. .

Since its inception, the bond market has seen a wide range of participation, including the city of Helsingborg, Sweden, which listed a sustainability bond as part of its drive to achieve net zero emissions by 2035.

A carbon removal market can accelerate the transition to a cleaner world

In the same way that exchanges facilitate the green transition by raising capital, the role of an exchange, as a meeting place between companies and investors to raise capital, can actively facilitate it. Puro.earth, the world’s first marketplace for industrial carbon removal instruments, offers a verifiable and tradable marketplace through an open online platform.

The platform already provides carbon removal services to some of the world’s largest companies such as Microsoft (MSFT).

With the acquisition of Puro.earth, the creation of the world’s first and largest sustainable bond market and the development of a label of green designations that connects climate-conscious investors with more sustainable companies, the Nasdaq aims to be an active part of the climate solution.

Going forward, Nasdaq will continue to facilitate the financial services industry’s participation in the solution.

“We ensure [everyone] can be part of the green transition,” Ekström said.

Opening bell with Dagens Industri |  Speaker: Fredrik Ekström, Chairman, Nasdaq Stockholm


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