IOSCO Consults on Recommendations on Sustainable Finance Development
IOSCO published a consultation report that proposes 11 recommendations for emerging market member jurisdictions to consider when issuing regulations or guidance regarding sustainable financial instruments. The Growth and Emerging Markets Committee (GEMC) of IOSCO believes that its recommendations will benefit both issuers and investors by improving the consistency of regulation of sustainable finance in emerging markets. Comment period on the consultation ends on April 01, 2019.
Among other things, the recommendations propose requirements for disclosure of material Environmental, Social, and Governance (ESG) specific risks, aimed at enhancing transparency. The consultation report explores the trends and challenges that influence the development of sustainable finance in emerging capital markets. It also provides an overview of the initiatives that regulators, stock exchanges, policy makers, and other key stakeholders in emerging markets have undertaken in this area. The report identifies the prerequisites for creating an ecosystem that facilitates sustainable finance, such as an appropriate regulatory framework and fit-for-purpose market infrastructure, reporting and disclosure requirements, governance and investor protection guideline,s and mechanisms to address needs and requirements of institutional investors.
The proposed recommendations fall into the following categories:
- Integration by issuers and regulated entities of ESG-specific issues in their overall risk appetite and governance (Recommendation 1)
- ESG-specific disclosures and reporting (Recommendation 2)
- Data quality (Recommendation 3)
- Definition of sustainable instruments (Recommendation 4)
- Eligible projects and activities (Recommendations 5 to 9)
- Integration of ESG-specific issues into the investment analysis, strategies, and overall governance of institutional investors (Recommendation 10)
- Building capacity and expertise for ESG issues (Recommendation 11)
Related Links
Comment Due Date: April 01, 2019
Keywords: International, Banking, Securities, Sustainable Finance, ESG, Regulatory Framework, IOSCO
Previous Article
BOT and SBV Sign MoUs to Promote Regulatory and Fintech CooperationRelated Articles
APRA Publishes Results of Climate Risk Self-Assessment Survey
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
ACPR Publishes Updates Related to CRD IV and Covered Bonds
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
EIOPA Publishes Guidance on Climate Change Scenarios in ORSA
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
EBA and ECB Respond to Proposals on Sustainability Disclosures
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
EBA Publishes Multiple Regulatory Updates for Regulated Entities
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
EESC Opines on Proposals on CRR and European Single Access Point
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury Publishes Multiple Regulatory Updates in July 2022
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.
