Nasdaq President Addresses Sustainability Reporting

By Dave Armon, 3BL Media CMO
Jun 23, 2016 2:30 PM ET

The president of Nasdaq Inc. served as a different kind of market maker at a gathering of the Sustainerati this week.

Adena Friedman was celebrated at the United National Global Compact’s Leadership Summit as a role model for those just beginning their careers in sustainability and social impact work. Starting as an intern as she finished business school in 1993, she is now widely seen as the apparent heir to Nasdaq CEO Bob Greifeld, when he retires.

Friedman was also responsible for an unexpected round of applause when the event’s emcee, journalist Henry Bonsu, described himself as a male feminist.

In her address, Friedman talked about changing the mindset about sustainability in the global capital markets and stock exchange community. (Here’s a link to the UN video stream of the event.)

While acknowledging a growing list of stock exchanges are making environmental, social and governance (ESG) standards a condition for stock listing, Friedman said Nasdaq would continue to support existing disclosure rules around “corporate behavior,” financial performance and governance.

Nasdaq has not yet mandated additional ESG disclosure for its listed companies, she said.

“If we make the make the mandatory standard too high, it will stifle the ability for entrepreneurial companies, and particularly small businesses, to get access to capital to grow, create jobs, create wealth and improve the overall economy,” Friedman told the UN audience. “Therefore it is a balance that we have to strike between mandatory and voluntary standards.”

In October, the World Federation of Exchanges, a trade group exchanges, including Nasdaq, issued reporting guidance recommending its member exchanges choose whether to make ESG reporting directives mandatory for listed companies or to adopt them as voluntary guidelines.

The U.S. Securities and Exchange Commission, which regulates Nasdaq and the New York Stock Exchange, is considering whether to require additional disclosure about sustainability from publicly traded companies. A public comment period on the proposed rules will expire in mid August. 

“We are interested in receiving feedback on the importance of sustainability and public policy matters to informed investment and voting decisions,” the SEC wrote in its call for comments. “In particular, we seek feedback on which, if any, sustainability and public policy disclosures are important to an understanding of a registrant’s business and financial condition and whether there are other considerations that make these disclosures important to investment and voting decisions. We also seek feedback on the potential challenges and costs associated with compiling and disclosing this information.”