Green Impact Exchange (GIX): A realistic ‘green’ stock exchange project?

Green Impact Exchange (GIX): A realistic ‘green’ stock exchange project?

What if there was a stock market, like New-York’s, solely dedicated to companies committed to sustainable development? This U.S. born project is called the Green Impact Exchange (GIX). Could this be the future of truly green investing?

Is it possible today to invest in the stock market with the main criterion: supporting only truly green companies? This seems almost impossible. The most surprising is the ESG ETF. Let’s recall what it is. An ETF (Exchange Traded Fund), also called a tracker, is an index fund that seeks to follow as faithfully as possible the evolution of a stock market index, both upwards and downwards. ETFs are investment funds issued by asset management companies and approved. ESG ETFs (Environment, Social, Governance) are funds supposed to allow investors to invest their money while respecting ethical and sustainable criteria. Unfortunately, this is not the case. In these ESG ETFs, we find companies that do not correspond to sustainable values.

Moreover, financial professionals have difficulty identifying truly sustainable investments and Greenwashing. Indeed, it is difficult to make something “new” from something “old”. The only solution that seems wise would be to create a Green Stock Exchange. A market welcoming only companies dedicated from their creation to sustainable investments. To our knowledge, very few studies, particularly academic ones, mention this idea.

Europe in the lead?

Comparing Europe and the United States in terms of ESG adoption, Europe seems to be leading, driven by both cultural sensitivities and a decade of regulatory initiatives. The United States, on the contrary, does not seem to have moved at the same pace. It is only in 2024 that it implemented climate-related disclosure requirements.

With climate change becoming more and more pressing, European regulators have implemented new reporting requirements, adding extra-financial indicators for the first time. This is the case of the Corporate Sustainability Reporting Directive (CSRD) regulation adopted on January 1, 2024. The CSRD Directive is a European directive aimed at improving and harmonizing companies’ disclosure of ESG information.

In doing so, the authorities have used a method that seems to lead to difficulties at the implementation level. The Directive takes as its point of support an already “grey” stock market. Using such a market as a political tool to influence the footprint of companies seems ambitious and difficult. Changing the very nature of companies through a simple regulation, even if it is a “Hard Law”, requires a very long time.

Sustainable hurdles

At the same time, European regulation hopes to be able to very simply oblige companies to disclose their environmental impacts and thus offer investors sustainable choices. Such an approach seems ideal but probably a little naive.

Moreover, despite these efforts, at the European level, this large number of ESG regulations has created unexpected problems. They have complicated comparability between companies. Investors are not the only ones to be confronted with this problem, but also ESG experts.

Indeed, after analyzing ESG ratings from seven different providers for S&P 500 companies between 2010 and 2017, Brandon, Krueger, and Schmidt (2021) found that the average concordance rate between the two rating agencies was less than 50%, with the lowest for governance (16%) and the highest for environmental factors (46%).

Moreover, Europe requires companies to disclose their environmental impact before it can even be accurately measured. Such an approach is expensive, and not all companies can muster the resources to produce the indicators.

The irony is that some companies have decided to disclose their data as best as they can and sometimes manipulate it.

To be green or not to be

Today, European companies find themselves in a situation where it is easier and more strategic to appear green than to become green. It seems that the unbearable number of regulations has unintentionally led to more greenwashing.

These regulatory obstacles affect both companies and financial institutions. The latter must now deal with numerous labels and requirements. But here too, some have found a way to take advantage of them, misleading investors once again.

Whether for companies or financial institutions, the constant evolution of ESG requirements is gradually discouraging players who would be ready to change their behavior. If regulations were put in place to make a change, they have now become too critical of a constraint for companies to do so.

The time and resources required to comply with all the requirements prevent them from acting and building a better sustainable strategy. As for banks and investment funds acting in good faith, the labels have become too strict for them to be able to offer sustainable performance to clients.

Hard law vs Common law

Unfortunately, ESG regulations seem to have missed their target. In this regard, a growing sense of frustration is observed on the market. The figures are convincing. While companies were expected to implement the new European Corporate Sustainability Reporting Directive (CSRD) by 2024, a study by Lefebvre Sarrut revealed that 45% of European companies had not taken any measures in this regard.

It is fair to wonder whether strict regulatory measures are the best way forward. Perhaps Europe’s preference for “Hard law”, rooted in civil law traditions, limits its flexibility to adapt. The United States, as a society based on Common Law, tends to regulate less, favoring innovation and private sector initiatives. In short, the United States would be more in a “Soft law” approach based on the evolution of practices through initiative rather than by force of law. While Europe’s approach reflects a strong commitment to responsibility, its use of regulation to address ESG issues may be reaching its limits.


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So, is Europe the world leader in ESG? It’s not that simple. Historically, the US has not been very supportive of ESG, generally equating it with a “woke” movement. When comparing climate-related disclosures between our two stock markets, there is no doubt that America has made less effort than Europe. However, as a society based on common law, some US regulators simply argue that intervening is not their role. The stock market is not a political tool; its regulation is only intended to make it a safe, efficient, and reliable space for investors. If companies are the ones who need to change their behavior, forcing them is not the solution.

For example, the US has been willfully neglecting ESG regulation. However, an innovative American idea has recently emerged that could change the way companies look at ESG issues: the Green Impact Exchange.

GIX, the US solution

As Europe continues its regulatory journey, a new idea from the Unsited States may offer another way forward. It’s the Green Impact Exchange (GIX), an upcoming exchange created by former NYSE executives designed exclusively for companies committed to sustainable development. Set to launch in 2025, GIX will allow companies to list on the stock exchange without giving up their NYSE or Nasdaq status, provided they meet specific “green governance principles.” For environmentally conscious investors, GIX offers a clear choice: companies are either listed because they meet the standards or excluded if they don’t. This binary approach simplifies ESG assessment, reduces the risks of greenwashing, and allows investors to confidently support green companies.


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By reframing ESG as a business opportunity rather than a regulatory burden, GIX has attracted interest from companies. Indeed, GIX has reached out to over 700 public companies to gauge their interest in a deal-driven exchange. GIX’s interviews with board members, CFOs, investor relations officers, and sustainability directors revealed that companies across a range of economic sectors and market capitalizations want to increase environmental awareness and are willing to seek dual listings on the GIX to achieve this goal.

Large-cap issuers exhibit this phenomenon more prominently, with 60% of respondents indicating this. Of the 730 companies GIX has contacted so far, 230 have received positive feedback. Of these, 20 companies have expressed interest in joining the first group of companies to be listed at the launch of the exchange. Another 35 companies have expressed interest in being listed after the launch.

A leadership shift with GIX?

The GIX suggests that there could be a “Soft law” alternative to Europe’s “hard law” regulatory approach: a private stock exchange where sustainability and business incentives naturally align. This model, based on market forces rather than mandates, creates a space for companies to demonstrate their environmental commitments without having to deal with the regulatory fatigue that currently prevails in Europe.

By creating a dedicated space for committed companies, GIX offers a promising approach to ESG, fostering trust and transparency in the market itself. If successful, it could soon shift ESG leadership from Europe to the US, providing a compelling alternative to the burdens of over-regulation.

Nathan DuboisStudent at SKEMA Business School, MSc Financial Markets and Investments

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Dhafer SaidaneProfessor of Finance, Centre for Global Risks, SKEMA Business School - University Côte d'Azur, France

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