Featured Product

    IOSCO Report Sets Out Next Steps for Work on Sustainable Finance

    April 14, 2020

    IOSCO published a report that examines the sustainable finance initiatives by the securities regulators and the industry. It offers a detailed analysis of the most relevant international initiatives and third-party frameworks and standards related to the Environmental, Social, and Governance (ESG) factors. The report also identifies a number of improvement areas and articulates the need for IOSCO to play a key role in this area. The report finds that lack of consistency and comparability across third-party frameworks could create an obstacle to cross-border financial activities and raise investor protection concerns.

    The report highlights three recurring themes that involve multiple and diverse sustainability frameworks and standards—namely, sustainability-related disclosures, a lack of common definitions of sustainable activities, and greenwashing and other challenges to investor protection. The report indicates that many issuers and asset managers operating cross-border may be subject to different regulatory regimes or participate in multiple regional or international third-party initiatives. The wide variety of regulatory regimes and initiatives, often with inconsistent objectives and requirements, may prevent stakeholders from fully understanding the risks and opportunities that sustainable business activities entail. As a next step, to overcome these identified challenges, IOSCO has decided to establish a Sustainability Task Force with a mandate to address transparency and promote investor protection.

    The Task Force will work to improve sustainability-related disclosures made by issuers and asset managers, collaborate with international organizations and regulators to avoid effort duplication, enhance coordination of relevant regulatory and supervisory approaches, and conduct case studies and analyses of transparency, investor protection, and other relevant issues within sustainable finance. The key work of the Task Force will be to:

    • Improve sustainability–related disclosures by issuers and asset managers. To this end, the Task Force will identify and develop categories of disclosure that are material for investors and that are capable of falling within the supervisory and regulatory competence of securities regulators.
    • Assist IOSCO members to identify and address greenwashing and other investor protection concerns. The Task Force would examine categories of disclosure to assess whether industry specific or more broad metrics would provide decision useful information and comparability between different issuers. The Task Force would also engage with the industry, voluntary third-party disclosure standard-setters and other relevant organizations.
    • Address relevant issues within sustainable finance. These issues could include transparency issues among ESG data providers, disclosure of methods and governance among credit rating agencies and ESG rating agencies, practices and experiences of asset managers on the use of sustainability-related factors in investment decisions processes, and risks of greenwashing in the market for sustainable investment products.

     

    Related Links

    Keywords: International, Banking, Securities, ESG, Climate Change Risk, Sustainable Finance, Transparency, Disclosure, Systemic Risk, Sustainability Task Force, Credit Rating Agencies, IOSCO

    Related Articles
    News

    EC to Defer Application of SFDR Standards Till July 2022

    The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.

    July 23, 2021 WebPage Regulatory News
    News

    BoE Consults on Approach to Setting MREL, Publishes Bail-In Guidance

    The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.

    July 22, 2021 WebPage Regulatory News
    News

    EBA Seeks Views on Proportionality Assessment Methodology

    The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.

    July 22, 2021 WebPage Regulatory News
    News

    US Agencies Propose Changes to Call Reports and Instructions

    Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.

    July 22, 2021 WebPage Regulatory News
    News

    PRA Finalizes Rulebook Definition of Higher Paid Material Risk-Taker

    The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Examines Asset Encumbrance in Banking Sector

    The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.

    July 21, 2021 WebPage Regulatory News
    News

    EBA Publishes Methodological Guide to Mystery Shopping

    The European Banking Authority (EBA) published a methodological guide to mystery shopping.

    July 21, 2021 WebPage Regulatory News
    News

    APRA Issues Update on Capital Reform Policy Settings for Banks

    The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.

    July 21, 2021 WebPage Regulatory News
    News

    CPMI-IOSCO Assess Continuity Planning of Market Infrastructures

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.

    July 21, 2021 WebPage Regulatory News
    News

    ESMA Responds to Proposal Related to Sustainability Standards Board

    The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.

    July 21, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7283