On 14 April 2020, the International Organisation of Securities Commissions (IOSCO) published a final report on Sustainable Finance and the Role of Securities Regulators and IOSCO (FR01/2020), which helps market participants address issues related to sustainability and climate change.
The report provides an overview of the current sustainable finance initiatives taken by regulators and the industry. It also identifies a number of areas where improvements can be made.
In particular, the report highlights three recurring themes, namely (i) multiple and diverse sustainability frameworks and standards, including sustainability-related disclosure, (ii) a lack of common definitions of sustainable activities, and (iii) greenwashing and other challenges to investor protection. It further indicates that the verity of jurisdictions with different regulatory frameworks and approaches, often with inconsistent objectives and requirements, may prevent stakeholders from fully understanding the risks and opportunities that sustainable business activities entail.
The challenges raised in the IOSCO’s report will be addressed by Board-level Task Force on Sustainable Finance established in February 2020. IOSCO announced that the Task Force on Sustainable Finance will seek to improve sustainability-related disclosures made by issuers and asset managers. It will also work in collaboration with other international organisations and regulators to avoid duplicative efforts and to enhance coordination of relevant regulatory and supervisory approaches. Finally, it will conduct case studies and analyses of transparency, investor protection and other relevant issues within sustainable finance.
IOSCO’s final report can be found here.