James Zhan, Director of Investment & Enterprise for UNCTAD interview with David Nelson at Sustainable Stock Exchange Initiative (NYSE)

HIGHLIGHTS

• The media plays a key role in achieving the Sustainable Development Goals
• There is currently a gap in financing for the Sustainable Development Goals 
• The emerging market exchanges are leading the pack in cooperative responsibility

FULL COVERAGE

• Watch complete coverage of the UNCTAD Sustainable Stock Exchange Initiative

INTERVIEW TRANSCRIPTS:  James Zhan, Director of Investment and Enterprise for UNCTAD and David Nelson

David Nelson – Show Host, Traders Network Show: 00:02

Welcome back. I’m David Nelson for the Traders Network Show broadcasting worldwide from the New York Stock Exchange for iHeartRadio and Equities.com. We’re here for an event being hosted by the United Nations Sustainable Stock Exchanges Initiative. My next guest is Dr. Zhan, who’s the Director of Investment in Enterprise Position at the United Nations Conference for Trade and Development. Dr, welcome. Thanks so much for being with us. 

James Zhan – Director of Investment & Enterprise, UNCTAD: 00:28

Thank you very much, David, for having me here. 

David Nelson – Show Host, Traders Network Show: 00:31

You’re welcome. Dr. You have a PhD in international economics. You’re also the Executive Director at the United Nations for the Conference of the CTAD touches on your whole, a number of academic physicians as well. And you are regularly appear on international media. How important is using the international media to formulate and get the message out that you’d like to see for the initiative?

James Zhan – Director of Investment & Enterprise, UNCTAD: 01:00

It is very important. I’m media is the crucial mean for us to communicate to the world after all for the United nations, for our, for our organization in particular, that we supposed to have the mission of alleviating poverty. We supposed to do good for people worldwide. But then what we are doing is in a special area, which is investment policies and apprenticeship policies. And for many type of work that we are doing, like for the sustainable stock exchanges, they are not well known to the world. That is why we need media to communicate it to the wider community, to mobilize all the development stakeholders, to support our initiative, to push us to move further. And so that is very important now also for them to understand what we are doing is for them. We are from them, we are for them.

David Nelson – Show Host, Traders Network Show: 02:02

There were several proposals made in until today’s luncheon when you were speaking and there was much talk about the way companies report. And one of the things you and I had talked about off camera was integrating SDG or Sustainable Development Goals into the report. Where are we in the process today?

James Zhan – Director of Investment & Enterprise, UNCTAD: 02:20

For the Sustainable Development Goals at the moment, we know that the leaders worldwide are going to endorse it or to commit it to it and then there’ll be a challenge. One of the major challenges is that if you don’t have the funds and you don’t have the goals, meaning no money, no achievements of the goals. Therefore, financing of SDG is a major, major challenge. According to our analysis in our world and investment report 2014 that was submitted to the, to the UN General Assembly. We estimated that there is a huge gap for financing of the Sustainable Development Goals. Roughly is about two point 5 trillion us dollars annually for developing economies. Overall, we need five to 7 trillion us dollars annually. And how can we get that? There’s a pirate paradoxical situation. It’s not that the world does not have the money. We know that there’s excess liquidity.

James Zhan – Director of Investment & Enterprise, UNCTAD: 03:27

We know there’s a huge pool of financial resources is in almost 200 trillion US dollars, but how to get this financial assets into the sustainable development goal sectors, how to turn the money into productive capital and to channel it into the Sustainable Development Goals sectors like infrastructure, public services, house education is a big deal. Secondly, there’s a challenge how to promote environmental social governance behavior of the firms that to mainstream these issues into their business models. Namely a responsible investment. We called CSR, corporate social responsibility. So on the one hand we need a financing investment in SDGs. On the other hand, we need to promote sustainable development related business models.

David Nelson – Show Host, Traders Network Show: 04:31

There are two enterprises that have to come along with your vision. Certainly the stock exchanges would have to endorse that, but also then it goes down to the companies themselves, the members of the exchange, which exchanges are leading the effort today. How would you describe what’s taking place so far?

James Zhan – Director of Investment & Enterprise, UNCTAD: 04:49

Yeah, it’s interesting. I would like to look at stock exchange worldwide today into three segments. One is the advanced the countries mature markets. We have NASDAQ, New York, London, Japan for example. This is one group. The second is that advanced, the emerging market stock exchanges. That’s the South Africa, India, Brazil, Turkey for example. That’s the second group. The third group will be those that are less developed developing countries. And we have the annuity members like we have Kazakhstan, we have Lau and we have Nigeria, Kenya, Peru. These are the third categories. Now for the interestingly in the area of corporate responsibilities in ESGs whose cooperate sustainability reporting. In fact the emerging market, the advanced, the developing countries market, the stock exchanges, they are leading the movement because they are moving from voluntary to mandatory and they have a lot of best practices in promoting ESG. Sue’s promoting integrated reporting. And we have advanced the countries stop exchanges that they are still following more or less the voluntary approach. And then we have all these lease the development countries. Can control asset, the new stock exchanges for them. They are still working very hard on developing the financial market itself. Well they have good political will to follow the best practices to take care of environmental social issues and then they need to learn.

David Nelson – Show Host, Traders Network Show: 06:55

Let me ask a follow up to that because it brings up in terms of comp companies, you know, two types of companies and emerging company that’s listing on the exchange for the first time and maybe a more mature company you know, one of the Stalwarts of the exchange. Is it true that the newer companies that are coming in, they’re more apt to endorse the principals and if so, their costs are probably going to be higher. How do you bring the big companies on the other side of that along for the ride so that everybody’s on the same playing field?

James Zhan – Director of Investment & Enterprise, UNCTAD: 07:25

Yeah, that’s, that is what that is what our Sustainable Stock Exchange Initiative is doing. One of the functions for us for this initiative is to help all those new stock exchanges to have the best practices to learn from the other stock exchanges which have already been having this international best practices in promoting responsible investment. So that’s what we are doing through the capacity building through the exchange of best practices. Like today we have that you, yourself, David, you witnessed that. So this the, this is the way that we do that. We also formulate the guidelines to advise the countries to use them to follow that. So this is another way of helping them.

David Nelson – Show Host, Traders Network Show: 08:22

Dr. well said we’re out of time. We’re actually at the New York Stock Exchange and they shut the doors on us. Any last words for the UN and the initiative.

James Zhan – Director of Investment & Enterprise, UNCTAD: 08:32

Yup. Today as you know, that I was chairing this event and I was one of the funders of this initiative with other colleagues. My observation of what we had been doing and what is happening in this field, sustainable stock exchanges moment is that we reached a, we need to gear up. We have a new set of challenges, which is different from a little bit different from what we have in the past. Let’s see. In 2009, when we established this initiative, at that time we were promoting corporate reporting on sustainability issues. And we know today most of the firms, especially the largest firms, according to our statistics, they reporting one way or another on the environmental and the social issues. We caught a man financial reporting. Now we have reached a stage that we need to do two things.

James Zhan – Director of Investment & Enterprise, UNCTAD: 09:35

One is that to ensure that the cooperative reports a nonfinancial use our sustainability uses, are effectively used, which is not yet the case. This is an important tool, integrate reporting. But we use effectively for the development society, our dependent stakeholders to monitor the performance of the firms and the for firms to exchange best practices. We need effective use of that. The second challenge is harmonization of the standards for the reporting. Because for the time being, there’s a proliferation of standards or the private standards, industrial association standards, but we need to harmonize them in order to have integrate reporting system so that the reports can be comparable. So we can analyze the report, we can benchmark all these performers, we can have meaningful index worldwide. So these are the two challenges to carry the initiative forward, to take it to a new height. So that is the consensus of this event. As you see, it’s an enormous challenge.

David Nelson – Show Host, Traders Network Show: 10:43

By the way, congratulations on the event. Doctor, thanks so much for being with us. Thank you. That was Dr. Zhan who’s the Director of Investment and Enterprise Position at the United Nations Conference for Trade and Development. By the way, a quick thank you goes out to 1-800-Publicrelations for the PR and media support. Thanks for joining. I’m David Nelson. 

James Zhan – Director of Investment & Enterprise, UNCTAD: 11:11

I should thank also 1-800-PublicRelations, for the excellent job. I did thank them at the event. Now I wish to say it again and that we really appreciate their contribution.

David Nelson – Show Host, Traders Network Show: 11:15

Well, thank you. Thank you so much, doctor. Thank you. Have a great day.