The GIX will be a new registered securities exchange that uses listing standards to incentivize public companies to credibly commit to good “green” governance. We are currently developing the details of listing rules based on Green Governance Principles that issuers must adopt in connection with listing, and a listings compliance program to ensure that issuers are serious about their green commitments.
Simply put, exchanges are regulated, and their standards are inherently enforceable. There are real consequences if a company defaults on its obligations to an exchange – from delisting, to investigation by the SEC, to negative press triggered by a reportable public event. So, companies that choose to list on the GIX are signaling to investors that they are serious about their commitments.
The short answer is that all of us have children, and grandchildren, and nieces and nephews, and other people whom we like, and we want them to have a sustainable future. There's an old proverb that the best time to plant a tree is 20 years ago, but the second best time to plant it is today. GIX is our tree.
The longer answer is that the current ESG ecosystem is well intentioned but has yet to deliver on its promises. Currently there is no easy, reliable method for investors to ensure the companies they are supporting are actually delivering on their promises – in fact, it encourages "greenwashing" as much as actual progress. Companies and investors need a simple, binary investment screen: either a company has adopted the principles and is listed, or it hasn’t and it’s not. These investors will reward companies that list on the exchange by allocating green investment dollars to them. Investors win because the companies’ commitment is enforceable (through delisting).
- Green Leadership – The company and its board must make a public commitment to green values and create meaningful mechanisms to hold itself accountable
- Green Stakeholders – The company must identify, engage, and communicate with key stakeholders
- Green Goals – The company must have a plan (short-, medium-, and long-term) to operate its business sustainably
- Green Strategy – The company must align its business strategy with its principles and implement policies and processes designed to achieve its green commitments and goals
- Green Compliance – The company must commit to regular reporting and analysis of transparent, verifiable auditable green metrics
- Green Alignment – The company must ensure that its green commitment is reflected in all aspects of the company's business and operations, not "bolted" on after the fact
The GIX does not focus on individual green metrics (e.g., yearly carbon output) but instead looks at whether the company’s governance principles are structured and aligned in ways that will lead to positive green outcomes. It's not that metrics aren't important, but that without a plan and a strategy, metrics are just numbers.
Listing on the GIX will verify and validate companies' commitment to environmental goals, thereby making GIX-listed issuers a more attractive investment for green- and ESG-conscious investors. It also provides a unique benefit for firms seeking ESG earmarked funds (better branding, ease of raising funds, and the potential for better stock performance).
GIX will begin listing and trading companies after it receives regulatory approval from the US Securities and Exchange Commission. If you would like us to keep you posted about our progress, please sign up for our mailing list.
GIX will initially require dual listing (that is, being listed on another exchange) as a qualification to list on our exchange. In the future, we may offer companies the option to use GIX as their primary listing venue for ordinary equity shares and/or other classes of equity securities.
The listing fee for a company to join and list on the GIX will be in line with other major exchanges. For a company to be listed, it must also meet and maintain the Exchange's green governance criteria. Failure to comply with exchange rules and regulations may result in delisting from the Exchange.
GIX supports and encourages companies to follow existing reporting standards, but the GIX will not require a listed company to follow a particular standard-setting organization's guidance. We believe that it is more effective for a company to pick the standards that are best for its industry or sector, as long as the company is transparent about what metrics it uses and why those metrics are best for the company, and discloses how it applies the selected metrics.
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Investors will trade on the exchange because it makes it easy for them to find pro-ESG investments to add to their green portfolios, and also for the opportunity to play a personal, direct role in ensuring corporations uphold their ESG obligations, responsibilities, and promises.
We're still working out the details, but we expect the trading fees for the GIX to be in line with other major exchanges.