Greenwashing, ISSB standards tops IOSCO green agenda

Global securities regulators are planning to accelerate their efforts against greenwashing and further the development of sustainability reporting standards.

Following a board meeting last week, umbrella group the International Organisation of Securities Commissions (IOSCO) announced that it has adopted a “far-reaching 2022 work plan” focused on developing sustainable finance.

“IOSCO has explained very clearly to market participants how greenwashing can be avoided. We need everyone in the securities sector to work with us now to promote good practices and call out greenwashing,” said Rodrigo Buenaventura, chair of Spanish regulator Comisión Nacional del Mercado de Valores (CNMV), in a statement.

“Building trust through high standards of behaviour is critical so that investment products described as sustainable actually are,” he added.

Erik Thedéen, chair of IOSCO’s sustainable finance task force and director general of Finansinspektionen (Swedish Financial Supervisory Authority).

To that end, IOSCO said it’s planning to analyse draft climate and sustainability reporting standards from the newly established International Sustainability Standards Board (ISSB), which are expected to be published this year.

IOSCO said that if it determines those 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.”

The global group said it intends to work on developing assurance standards for sustainability reporting, noting that it has “identified independent assurance of the quality of corporate reporting of sustainability information as a key element of building trust in sustainability reporting.”

In addition, it plans to undertake a review of carbon markets from a regulatory perspective, and to push for standards in asset management, ESG ratings and data providers.

“Our work on endorsing the ISSB standards is part of a wider push by IOSCO to professionalize all aspects of sustainable finance,” said Erik Thedéen, chair of IOSCO’s sustainable finance task force and director general of Finansinspektionen (Swedish Financial Supervisory Authority).

The ISSB was announced in November 2021 as one in a series of “significant developments” from the International Financial Reporting Standards Foundation (IFRS).

Broadly, the aim is to strengthen and standardise the practice of non-financial reporting to address ongoing investor demand and capital markets’ need to monitor a wider variety of risks and opportunities.

©Markets Media Europe 2022

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