On 1 February 2019, the International Organization of Securities Commissions (IOSCO) published a consultation report on sustainable finance in emerging markets and the role of securities regulators (the Consultation).

Based on analysis by IOSCO’s Growth and Emerging Markets Committee (GEMC),  the Consultation proposes a set of 11 recommendations that member jurisdictions should consider when issuing regulations or guidance regarding sustainable instruments and additional disclosure requirements of ESG-specific risks. 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 and taxonomy of sustainable instruments (Recommendation 4);
  • specific requirements regarding sustainable instruments (Recommendations 5 to 9);
  • integration of ESG-specific issues into the investment analysis, strategies and overall governance of institutional investors (Recommendation 10); and
  • building capacity and expertise for ESG issues (Recommendation 11).

The GEMC encourages its members to consider the implementation of this guidance in the context of their legal and regulatory framework, given the significance of the associated risks and opportunities. The deadline for responses to the Consultation is 1 April 2019.