A new stock exchange dedicated to sustainable investing moved a step closer to opening after receiving backing from the U.S. Securities and Exchange Commission.
The Green Impact Exchange (GIX) said in a statement on Monday that the SEC approved an amended application to register as a national securities exchange. An SEC spokesperson confirmed the application approval. The exchange expects to begin trading early next year.
GIX is taking steps to open during what is a challenging period for sustainable investing. In the past week alone, almost $5.7 billion was pulled from environmental, social and governance-focused exchange-traded funds, the most in more than a year, according to data compiled by Bloomberg. About $9 billion was withdrawn from sustainable equity funds last month with the selling “intensifying” since February, analysts at Barclays reported.
But GIX founders expect global demand to eventually grow as investors consider the financial implications of climate change.
“US investors and companies are continuing to pursue sustainability because it makes financial and competitive sense,” GIX co-founder Charles Dolan said in a statement. “Public markets like GIX have a pivotal role to play in connecting sustainable investors with companies that understand that.”
There are signs that money is flowing back into parts of the market for green investments. Venture capitalists and private equity firms put more than $5 billion into climate-tech startups across the U.S. in the first quarter, up almost 65% from a year earlier, according to data from market intelligence firm PitchBook.
GIX plans to be the first exchange in the U.S. dedicated to the sustainability economy. The SEC approval order is “an important step forward for sustainability-minded investors and companies,” said Dan Labovitz, GIX’s other co-founder who also serves as chief executive officer.
Ahead of the launch, GIX is working with the Financial Industry Regulatory Authority on deploying the required regulatory services, Labovitz said in an email. The exchange will dual list companies that are committed to sustainable governance and transparency, he said.
“We’ve been in contact with hundreds of companies over the past 18 months,” Labovitz said. “Companies that do business globally also recognize that in order to remain competitive they must continue to make strides in making their businesses more sustainable. We’re not seeing evidence of a slowdown on the ground, and if anything, we are seeing signs that it will continue to grow.”
— With assistance from Lydia Beyoud.
