The Nasdaq OMX Group is lending its voice to the growing debate over the role of exchanges in requiring listed companies to disclose their performance on ESG issues, as environmental, social and governance matters are called. Nasdaq, however, is seeking to promote ESG reporting standards for listed companies without putting forth actual requirements, and some observers say that amounts to more talk than action.

Meyer “Sandy” Frucher, vice chairman of Nasdaq OMX Group in New York, says the exchange’s approach of seeking coordinated action among exchanges will prove more effective than exchanges adopting reporting standards on their own. But Nasdaq has neither defined which sustainability factors it thinks are the most important for its listed corporations, nor provided details on current discussions with other exchanges. It does, however, support the reporting standards for companies set out by the Amsterdam-based non-profit organization the Global Reporting Initiative (GRI). Under these standards, companies report key indicators of their performance on economic, environmental and social issues, with the last broken down into the subcategories of labor, human rights, society and product responsibility. This year the exchange also plans to host one conference a quarter on the topic.

Steve Waygood, Aviva Investors’ head of sustainable research and engagement in London, believes more aggressive action is necessary. Waygood says emerging-markets exchanges have taken the lead on the issue. BM&FBovespa, Johannesburg Stock Exchange and the Istanbul Stock Exchange are signatories to the United Nations’ Principles for Responsible Investment, an initiative that began in 2006 to encourage institutional investors to embrace ESG, while the other major exchanges are not. Many emerging-markets exchanges also provide sustainability guidance for their listed companies. BM&FBovespa has taken matters a step further. In 2012 the Brazilian exchange began required each listed company to either provide a sustainability report or explain why it does not. South Africa, India and Hong Kong are also incorporating sustainability into their listing rules. “In many ways, these emerging markets are running ahead of the developed-country exchanges on this agenda,” says Waygood. Although Aviva pushes for greater disclosure from companies it invests in, Waygood believes it necessary for regulators to mandate greater disclosure. “We consider that the significant gap in corporate disclosure of sustainability information is a market failure that requires government intervention to correct,” he says.

Frucher insists Nasdaq remains committed to ESG issues. To encourage broader change, it has adopted ESG reporting for its own operations. At the end of last year, Nasdaq OMX published its first sustainability report based on GRI reporting standards, and it was issued as a separate report rather than an “integrated” one, which is combined with financial statements. In that sustainability report, Nasdaq OMX said it is purchasing renewable energy from wind turbine farms, and its offices are being remodeled to LEED specifications. It also reported on key indicators such as direct energy consumption by its primary energy source and the benefits it provides to full-time, permanent employees and to employees covered by collective-bargaining agreements.