Move comes as Morningstar reaffirms its membership to service provider alliance.

The alliance was launched in September 2021 with the goal of uniting investment advisers, credit rating agencies, auditors, exchanges, index providers, ESG research and data providers, and proxy research providers to “fill the gap for net zero” in the financial sector. However, in August 2023, RI reported that the six separate sub-groups had been reduced to four: index providers, research and data providers, auditors and stock exchanges. Some references to credit rating agencies and proxy advisers were also removed from the alliance’s website. Cboe – which owns the Chicago Board Options Exchange and the stock exchange operator BATS Global Markets – joined the alliance in November 2022. At the time, Ed Tilly, former chair and chief executive of Cboe, said: “As the foundation for global market infrastructure, exchanges play a vital role in providing solutions, defining industry standards and engaging with issuers, investors and policymakers to promote sustainability in our capital markets.” Cboe had not replied to a request for comment at the time of publication. Other stock exchange members include HKEX, Euronext, Japan Exchange Group, JSE, LSEG, SGX, Bolsa Mexicana and the Luxembourg Stock Exchange. The UN sustainable Stock Exchange initiative is supporting and advising the sub-group.

e stock exchange sub-group’s target-setting framework was published and approved by Race to Zero in 2023. According to the guidance, exchanges should raise the visibility of climate-themed products and work towards mandatory climate-related disclosure in their markets. They should also “actively engage with local and global policymakers and standard setters to stay informed of and promote net-zero aligned policies”. Unlike other net-zero alliances, the NZFSPA has not experienced widespread exits, although Moody’s pulled out in November. RI reached out to other US members of the initiative. At the time of publication only Morningstar had provided comment. A spokesperson said: “Morningstar continues to be part of the Net Zero Financial Service Providers Alliance, and we continue to work individually towards the goals outlined in the NZFSPA’s target-setting frameworks published in June 2024.”

 

(Resources: Responsible Investor-https://www.responsible-investor.com/us-stock-exchange-group-leaves-net-zero-initiative/)