Financial and Monetary Systems

Stock exchanges can be pillars of trust in a turbulent world

Hong Kong Stock Exchange.

As trusted businesses, stock exchanges play a crucial role in providing the infrastructure that underpins the global economy Image: HKEX

Laura M. Cha
Chairman, Hong Kong Exchanges and Clearing (HKEX)
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Financial and Monetary Systems

This article is part of: World Economic Forum Annual Meeting
  • In their role connecting global markets, stock exchanges can reinforce trust on a global level.
  • They help strengthen financial flows and are key to building support for ESG policies, leading by example as corporate entities themselves.
  • Revitalizing global cooperation is necessary for advancing resilience, growth and security.

What do we need to create a more prosperous world? Capital, technology, people, ingenuity, institutions, hard work and infrastructure are some essentials.

But there’s something much more fundamental needed. Something that takes years to build but can be broken in seconds. Something that is core to every transaction, relationship, and plan we commit to. This core element is trust.

Trust is the invisible thread tying countries, trade, societies and communities together – and by some measures, it appears to be fraying. Geopolitical risks remain elevated, voter turnout has declined in some countries, concerns are rising around the breathtaking pace of technological change, and confidence in collective action to address climate change needs constant reinforcement.

Diagnosed by some as a “trust crisis”, this fraying of global trust is happening at a time when we need to come together to support new sources of growth, leverage the potential of new technologies and progress the fight against climate change.


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How do we respond? There’s no doubt that people worldwide hope the situation improves, that we can strengthen trust to bring the world together, and that the next phase of global growth is just around the corner. But hope is not a strategy.

The world needs role models to step forward, take leadership positions, set new governance standards, drive the speed of innovation, progress the fight against climate change and build more connectivity. Business is increasingly seen as the most trusted institution: Edelman’s 2023 Trust Barometer puts business ahead of governments, NGOs and the media regarding competence and ethics.

As trusted businesses, stock exchanges play a crucial role in providing the infrastructure that underpins the global economy, enabling two-way flows of dialogue, capital and opportunities, setting rigorous standards of governance to underpin market quality and investor confidence, and developing platforms and products to meet the needs of issuers and investors.

Connecting stock exchange markets and communities

At HKEX, we are intent on being a role model and change agent to connect the world, its markets and its communities for the benefit of all.

Hong Kong is an international financial centre with a system familiar to and trusted by investors. Our status as an East-West superconnector, located at the heart of Asia, with a central vantage point as the world’s centre of gravity pivots east, means we are ideally placed to lead. And, in our multi-faceted role as a market operator, regulator, educator and corporate, we have the opportunity to create solutions and move forward on multiple fronts.

Looking at the past 12 months, we have proactively been building market connectivity, leveraging and strengthening our superconnector status with a series of enhancements to our mutual market access Connect programmes, which provide investors and issuers with enhanced access to both international capital and the huge capital pools in mainland China.

There is a broad global trend of inter-exchange collaboration to support cross-border capital flows, with numerous examples between exchanges in Asia, Europe, the Middle East and North America. HKEX has been no exception, signing partnership agreements with the Indonesia Stock Exchange and Saudi Tadawul in 2023 to explore collaboration opportunities.

Uncovering new sources of growth

As well as increasing global connectivity, exchanges can play a key role in connecting capital with opportunities, particularly in innovative, tech-driven sectors. Between 2019 and 2023, companies in the tech sector raised $370.6 billion through IPOs, according to Ernst & Young, driving capital into fast-growing areas such as AI, biotech, cloud computing and life sciences.

It is incumbent on exchanges to continue looking for ways to meet the evolving needs of companies of tomorrow. HKEX, for example, has introduced new listing rules in recent years, such as a new chapter for specialist technology companies in 2023, and we continue to look for new ways to improve the attractiveness of our markets.

Driving the net-zero transition

While investors are relying on exchanges to connect them with opportunities, they are also looking for companies to provide more granular disclosure around their ESG performance. By imposing clear, robust and progressive standards for disclosure, application and implementation of ESG policies, exchanges can provide the transparency investors need to match their investment goals with ESG opportunities and drive the flow of capital into sustainable investments.

According to the World Federation of Exchanges 9th Sustainability Survey in 2022, 38 out of 49 exchanges surveyed around the world have issued formal guidance for listed companies around ESG metrics. More detailed, far-reaching disclosure rules are expected as the International Sustainability Standards Board’s global Sustainability Disclosure Standards are increasingly applied around the globe.

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Walking the walk as corporates

Exchanges are well known as key market infrastructure, but as corporate companies in their own right, they have the opportunity and obligation to walk the walk on sustainability and corporate social responsibility. That’s particularly important when it comes to net-zero targets. As an advocate for and regulator of issuers’ commitments to net zero, exchanges have a unique opportunity to set an example and promote the net-zero transition.

Therefore, it is encouraging to see a wide range of exchanges from across the world, including HKEX, joining the Glasgow Financial Alliance for Net Zero (GFANZ) and the Net Zero Financial Service Providers Alliance (NZFSPA) and committing to setting targets to progress the net-zero transition.

According to the World Federation of Exchanges 9th Sustainability Survey, 12 exchanges around the world had made net-zero commitments as of the end of 2022. There is significant room for improvement; I am pleased that, as a corporate, we are walking the walk and leading by example by announcing science-based, net-zero targets and a clear path forward in December 2023.

All these efforts are imperative because climate action can’t wait, innovation needs to move forward, and the world needs to come together.

In the face of fragmentation and fraying trust in the institutions that underpin the global economy, exchanges need to take the lead as “trust agents”. The world needs action, not apathy; role models, not rhetoric; change-makers, not commentators. Above all, it needs more connectivity, not less – and we are intent on playing our part.

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Financial and Monetary SystemsDavos AgendaGlobal Cooperation
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