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Bucharest Stock Exchange launches the first ESG - focused initiative on the Romanian capital market

9/15/2020

  • The initiative aims to promote responsible investing and highlight the importance of ESG standards among local capital market participants
  • Adrian Tanase, CEO, BVB: We consider this project as an important pillar in our plans to develop the local capital markets infrastructure. We aim to implement the best international standards by working with Sustainalytics, a leading global provider of ESG research, ratings and data.
  • Simon MacMahon, Executive Vice President, Sustainalytics: Sustainalytics is delighted to be working with BVB to bring this information to Romanian market participants. Access to high-level ESG insights will provide investors with greater transparency into how companies are addressing these critical issues and this initiative will additionally raise further awareness of responsible investing.

 

Bucharest Stock Exchange (BVB) has launched the first Environmental, Social and Governance (ESG)-focused initiative on the Romanian capital market, which aims to provide high-level ESG insights for BVB-listed companies.

Utilizing Sustainalytics’ flagship ESG Risk Ratings, BVB’s goal is to make available top-line ESG research and ratings for the majority of companies listed on its Exchange, to promote responsible investing and highlight the importance of ESG standards among Romanian market participants. The initiative also aims to encourage local companies to align their business strategies with ESG practices, which have witnessed a spectacular growth globally in recent years.

Sustainalytics’ ESG Risk Ratings are designed to help investors identify and understand financially material ESG risks in their portfolio companies and how that risk might affect performance. The ratings measure a company’s exposure to industry-specific material ESG risks and how well a company is managing those risks. Comparable across all industries, Sustainalytics’ ESG Risk Ratings provide a quantitative measure of unmanaged ESG risk and distinguish between five levels of risk: negligible, low, medium, high and severe.

„We have recently noticed a substantial increase in the investor and issuer interest towards the implementation of ESG standards on the Bucharest Stock Exchange,” said  Adrian Tanase, CEO of the Bucharest Stock Exchange. „We consider this project as an important pillar in our plans to develop the local capital markets infrastructure. We aim to implement the best international standards by working with Sustainalytics, a leading global provider of ESG research, ratings and data.”

„Investors are increasingly seeking more information on how corporations are managing the ESG issues that are material to their business,” said Simon MacMahon, Executive Vice President of Research Products, Sustainalytics. „Sustainalytics is delighted to be working with BVB to bring this information to Romanian market participants. Access to high-level ESG insights will provide investors with greater transparency into how companies are addressing these critical issues and this initiative will additionally raise further awareness of responsible investing.”

BVB aims to to develop the local ESG infrastructure starting from this first initiative, with the involvement of other market participants, by preparing and publishing presentation materials, guidelines for issuers and by launching new dedicated products.

ESG standards represent of set of norms taken into consideration by investors in their decision making process. ESG standards are made of three components: Environment – the environmental impact and externalities derived from the activity of the company, Social – the relationships with the stakeholders and Governance – encompassing the corporate governance rules and best practices.