On 4 November 2021, Erik Thedéen, the Chair of the International Organisation of Securities Commissions (IOSCO) Sustainable Finance Task Force gave a speech at the Green Horizons Summit during COP26, to discuss the IOSCO’s recent work on sustainable finance.
The IOSCO’s work has focused on issuers and asset managers’ disclosures, alongside the role of ESG data and ratings providers. A key focus has been ensuring investors receive timely, comprehensive and comparable information to mitigate greenwashing.
The IOSCO identified the IFRS Foundation as a way to develop a global baseline for investor-oriented sustainability standards, to do this they have announced the creation of a new International Standard Setting Board (ISSB). The ISSB global standards are the right tool to respond to the existing voluntary sustainability disclosures. They will provide consistency and comparability in sustainability-related information, allowing for a work towards high quality mandatory reporting. There will be a multi-stakeholder expert consultative committee to advise the ISSB.
Capital markets can support the transition to a more sustainable economic model if market participants have access to sound sustainability metrics and if they avoid greenwashing when marketing their ESG products. The IOSCO will publish a report on ESG ratings and data product providers soon, where they will call for transparency on how providers develop their ratings and good governance.
The IOSCO plans to convene an international roundtable of key players in sustainability assurance to assess the needs, challenges and opportunities for the enhancement of the current ecosystem and assurance framework. It also plans to intensify its capacity building efforts to assist jurisdictions in implementing the new requirements and in supervising their application in the markets.