In Their Own Words
As CEO of the Lima Stock Exchange, Francis Stenning has made sustainability a priority. He requires all Peru-listed companies to report on their environmental, social, and governance practices as a way to help investors make good choices. At the 2018 Sustainability Exchange he spoke with Ralitza Germanova of IFC about why this is important to him.
Francis Stenning: At the very beginning of our years in ESG, it was 2014 or 2015, I attended a meeting over at the World Financial Forum in Geneva. This was the first opportunity I had to sit with peers from other stock exchanges discussing issues related to ESG and reporting.
I was surprised by some statistics regarding which were the exchanges that had the most reporting and which were the ones with the worst levels of reporting. Surprisingly for me, Peru was ranked one of the worst on that list. So I immediately went back to the office and started looking for ways that we could really make a change. We came up with the idea of trying to make reporting mandatory as a way to help the companies, but also to help the market understand what was being done in Peru.
Close to 300 companies are obligated to report. It’s a very good step and it’s a benchmark that we can follow in terms of improvement from year to year.
I remember when the resolution from the regulator came out. At the Board meeting where I presented this, it was a surprise to many around the table. I was trying to convince them this is a trend coming, but it’s not just a fashionable thing, this is something that will have an impact in the market and we need to pay attention to it. As time goes by, it has proven that we made the right decision at that time.
– Francis Stenning, CEO, Lima Stock Exchange
Ralitza Germanova: The Lima stock exchange is a member of the UN Sustainable Stock Exchanges Initiative.
Francis: Yes, we decided to sign on 2015. The country was getting so involved in these issues that an institution within the country we thought that it was our duty to really get more involved in it.
Ralitza: So you have a vision and you like new ideas to push to the next level.
Francis: I’m always open to innovative ideas. I’m very conservative but I am much concerned with social issues. I was brought up in a country with very high unemployment, there were social issues to deal with during my university years, and after we had the terrorism years in Peru and then right after that we went into a very difficult economic situation, we had a very strong crisis in the country and it was hard for everyone to survive and to live in those years and so we need to capitalize better on exploring and exploiting or resources to provide wealth to the country. That’s something that I think we need to do in a very responsible way.
Ralitza: I wanted to ask what are you optimistic about.
Francis: Optimistic? Peru has had a wonderful decade of progress – and there is a new generation of Peruvians that believe much more in the country than my generation used to. This is a generation that really is willing to risk more, and is willing to invest more in the country, so I’m optimistic that the attitude makes a difference.
Ralizta: ESG is a challenging agenda but I truly believe as well that it’s the way forward and I hope that the millennial generation will get us there.
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IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. For more information, visit www.ifc.org