The International Organization of Securities Commissions (IOSCO) has adopted a far-reaching 2022 work plan to develop sustainable finance.
Ashley Alder, IOSCO Chair and head of the Hong Kong securities regulator, said “Our work plan for 2022 is very ambitious but it is of utmost importance that the regulatory community steps up its efforts in ensuring markets contribute positively to sustainability challenges, in a way that secures the integrity of financial markets and the protection of investors.”
At its meeting on 9 March, the Board stressed the importance of mitigating greenwashing and doing what is necessary to create reliable information on sustainability impacts for investors.
IOSCO is planning a timely and thorough review of the soon-to-be-published IFRS International Sustainability Standards Board (ISSB) Exposure Drafts of proposed climate and general sustainability disclosure requirements, as well as the final standards when they are produced. If IOSCO determines that the IFRS Sustainability Standards are fit for purpose, its decision would provide all 140 IOSCO member jurisdictions with the basis to decide how they might adopt, apply or be informed by the ISSB standards.
In parallel, IOSCO will also push forward work to develop assurance standards. IOSCO has identified independent assurance of the quality of corporate reporting of sustainability information as a key element of building trust in sustainability reporting.
IOSCO has also committed to an in-depth review of carbon markets to identify the vulnerabilities in nascent voluntary carbon markets, as well as the transparency and integrity in the functioning of carbon markets from the perspective of financial regulation.
In addition, IOSCO will also step up its engagement with both national regulators and market participants to push for the implementation of its recommendations addressed to asset management and ESG ratings and data providers. Rodrigo Buenaventura, head of the Spanish regulator and one of the leaders of this part of IOSCO’s workplan, said “IOSCO has explained very clearly to market participants how green-washing can be avoided. We need everyone in the securities sector to work with us now to promote good practices and call out greenwashing. Building trust through high standards of behavior is critical so that investment products described as sustainable actually are.”
Erik Thedéen, Chair of IOSCO’s Sustainable Finance Task Force and head of the Swedish regulator said: “IOSCO has an immense set of tasks ahead of itself in 2022. Our work on endorsing the ISSB standards is part of a wider push by IOSCO to professionalize all aspects of sustainable finance. The Task Force IOSCO has asked me to lead will work intensively in 2022 to deliver across a range of key issues which have to be worked out if markets are to gear up to supporting investors’ desire to invest in ESG.”