On 14 April 2020, the International Organisation of Securities Commissions (IOSCO) published a report on sustainable finance and the role of securities regulators.
The report provides an overview of current initiatives, both by regulators and the industry, and a detailed analysis of the most relevant ESG-related international initiatives and third-party frameworks and standards. It also identifies a number of areas where improvements can be made and articulates the need for IOSCO to play a key role in this area. For example, the work to date of the Sustainable Finance Network (SFN) of IOSCO points to a need to improve the comparability of sustainability-related disclosures. The 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 reflects the expectations from regulators and market participants that IOSCO should take an active role in facilitating global coordination and addressing transparency.
The SFN of IOSCO prepared the report, which highlights three recurring themes that involve multiple and diverse sustainability frameworks and standards, including sustainability-related disclosure, a lack of common definitions of sustainable activities, and greenwashing and other challenges to investor protection.
To address the challenges, IOSCO is establishing a board-level task force on sustainable finance. The task force will seek to improve sustainability-related disclosures made by issuers and asset managers. It will also conduct case studies and analyses of transparency, investor protection and other relevant issues within sustainable finance.