WSJ News Exclusive | Twilio, Asana to List on Long-Term Stock Exchange as ESG Push Continues

A Silicon Valley stock exchange that encourages long-term thinking over short-term gains has landed two marquee tech companies to be among its first listings, reflecting the growing popularity of sustainable investing.

Twilio Inc.,

TWLO 0.30%

a $67 billion software company, and

Asana Inc.,

ASAN 1.95%

a roughly $10 billion cloud software company run by

Facebook Inc.


Dustin Moskovitz,

are the first two companies to agree to dual list their shares on the Long-Term Stock Exchange. The CEOs of both companies, which also are listed on the New York Stock Exchange, were early investors in LTSE with financial stakes of less than 1.5%.

To list on LTSE in August, Twilio and Asana are agreeing to a slate of commitments such as aligning executive and board compensation with long-term performance; taking customers and employees into account; and explaining how the company’s board oversees its long-term strategy. These commitments must be concrete policies that can be monitored by LTSE.

The companies and the exchange hope the listings will be a signal that their stocks should appeal to long-term investors, potentially reeling in some of the hundreds of billions of dollars stashed in funds dedicated to environmental, social and governance investing. It also would lend credence to LTSE, which has long been embraced by venture capitalists and tech founders but has yet to list a single company.

Stock exchanges often serve as gate keepers for corporate governance and provide a platform for a company’s shares to be traded. There are more than a dozen exchanges in the U.S., and most only operate as trading platforms.

‘We’re starting to enter a realm where there is a higher expectation of companies,’ Twilio CEO Jeff Lawson said.


David Paul Morris/Bloomberg News

The two largest in the U.S., New York Stock Exchange and Nasdaq, are dominant players in both aspects. Those exchanges also have recently been bolstering their advisory services around ESG to their listed companies.

Long-Term Stock Exchange started trading stocks in September, and only a fraction of shares are traded on its platform. Its primary focus is on ensuring stakeholder-focused corporate governance, according to its founder and Executive

Eric Ries.

Investors are demanding that companies pay more attention to their progress toward social and environmental goals, said Twilio CEO

Jeff Lawson.

“We’re starting to enter a realm where there is a higher expectation of companies,” he said. “LTSE takes what various pledges have been and codifies it. It’s companies putting their money where their mouth is.”

Twilio and Asana are still working out what their exact commitments will be, but Messrs. Lawson and Moskovitz said they would likely be in line with what the companies already are doing.

For example, Twilio already is focused on its social impact. Mr. Lawson highlighted, which supports nonprofits and social enterprises and is funded by 1% of Twilio’s equity. The company pledged $10 million to Covax, a global initiative to vaccinate lower-income countries against Covid-19. Mr. Lawson said he hopes listing on LTSE can attract more long-term investors.

‘The material benefit of being seen as an ESG leader has become bigger as so much money has flowed in.’

— Long-Term Stock Exchange CEO Eric Ries

Asana’s Mr. Moskovitz pointed to the company’s commitment to building an inclusive and diverse employee base. (Asana’s website shows 30% of its U.S. employees identify as Asian, while 46% identify as Caucasian; 49% identify as male and 43% as female.)

In 2011, Mr. Ries proposed the idea for a long-term exchange in his book “The Lean Startup.” He won support from Silicon Valley entrepreneurs, including venture capitalist

Marc Andreessen

and LinkedIn co-founder

Reid Hoffman.

The decision to let companies write their own long-term themed commitments wasn’t the original plan for the exchange. On its journey to Securities and Exchange Commission approval, LTSE ended up scrapping more ambitious requirement plans for listing companies, including barring quarterly guidance and banning executive bonuses tied to short-term financial targets.

Finding its first listings also proved challenging. To sweeten the deal, LTSE cut its listing fee by 50% in 2021. To assuage executives concerned about low trading volumes on the new exchange, LTSE pitched companies the idea of dual listing, meaning their stock is primarily listed on either the Nasdaq or NYSE.

Other exchanges have tried to pick away at NYSE’s and Nasdaq’s dominance in corporate listings. None have made much progress. IEX Group Inc. spent years wooing companies to list on its upstart exchange, but closed its listing business in 2019 after winning only one.

Mr. Moskovitz, a longtime LTSE supporter, said he considered dual listing with LTSE last fall when Asana went public but the timing didn’t feel right. Asana already was doing something different by going public in a direct listing on the NYSE. Adding another twist to its stock-market debut felt like too much for investors, he said, though he said he made LTSE-inspired commitments in his founder letter and in Asana’s regulatory filing at the time of its initial public offering.

“We wanted to establish ourselves as a public company,” Mr. Moskovitz said. “We now feel we’re on stronger footing to take this new step.”

In addition to Twilio and Asana, expense-reporting software company Expensify Inc. also is looking at dual listing with LTSE as it goes public, people familiar with the matter said. Last year,

Airbnb Inc.

considered dual listing with LTSE at the time of its IPO but decided against it, people familiar with the matter said.

Globally, sustainable-fund assets rose to nearly $2 trillion at the end of the first quarter, according to Morningstar. Investors poured $68 billion into

BlackRock Inc.’s

sustainable products last year.

“The material benefit of being seen as an ESG leader has become bigger as so much money has flowed in,” said Mr. Ries.


How do you think the long-term stock exchange might change the business landscape? Join the conversation below.

Recognizing the importance of this segment of investing, companies going public are pitching themselves as mission-driven, bankers and lawyers say. Part of Swedish oat-milk maker

Oatly Group

AB’s recent IPO pitch was directly to ESG funds, people familiar with the matter said. Online thrift store

thredUP Inc.

not only called itself mission-driven in a filing ahead of its IPO, but it also dedicated an entire section to ESG.

Mr. Lawson said LTSE can help give a stamp of approval to companies who make ESG pledges. “If LTSE helps connect companies with investors who also value those things like ESG and long-term focus, that’s a good thing,” he said.

Investors propelled ESG funds to new heights in 2020, and federal agencies are watching. WSJ explains why regulators have ethical and sustainable investment funds under review. Photo Illustration: Alex Kuzoian

Write to Corrie Driebusch at [email protected]

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