World Federation of Exchanges publishes open letter urging coordinated action on fragmented cross border sustainability regulation

The World Federation of Exchanges, the global industry association for exchanges and clearing houses, has published an open letter warning that fragmented sustainability regulation across jurisdictions is creating barriers to capital movement and increasing costs for exchanges, listed issuers and investors. It calls on regulators, governments and related bodies to take coordinated action so firms operating internationally can manage sustainability obligations more efficiently and direct more capital toward substantive sustainability outcomes rather than formal compliance. The letter sets out four priorities: align and make rules interoperable with leading global standards, frameworks and regulations, adopt principles-based and outcomes-focused approaches, provide greater clarity, consistency and predictability, and use deference and passporting where appropriate. The federation says fragmented regimes duplicate compliance costs, hinder cross-border expansion and affect business margins, investor returns and customer prices. It argues that deference and passporting can reduce duplicative requirements across jurisdictions while maintaining investor protection, market integrity, and the consistency, comparability and decision usefulness of outputs.