A new IOSCO taskforce will work to identify commonalities across sustainability disclosure standards from across the world to develop principles-based guidelines.
IOSCO (International Organization of Securities Commissions) reportedly plans to harmonise sustainability disclosure standards from across the world in order to make it easier to compare information.
According to a Financial Times report, IOSCO secretary-general Paul Andrews said at a conference that a plethora of sustainability frameworks makes it difficult to compare one set of company ESG disclosures with another. While companies have a multitude of choices in terms of what ESG risks they report, there is “no common definition of what a sustainable finance product is”, he said.
In response, IOSCO has set up a taskforce to identify commonalities across sustainability disclosure standards from across the world, with a view to developing a “more cohesive, more transparent and [ . . .] more standardised” format to make it easier to compare information.
The aim of the initiative is to devise a set of guidelines that are principles-based yet “granular enough to be meaningful”, Andrews said, comparing the exercise to the process for defining accounting standards decades earlier, now known as IFRS.
IOSCO will also probe greenwashing in asset management and the emerging role of credit rating agencies and index providers in issuing ESG ratings, examining their methodologies and supervisory practices.
While IOSCO’s output will not be legally binding, it could influence the direction of future rulemaking as global policymakers develop national ESG rulebooks.
IOSCO is aiming to finalise its work and seek industry input by October 2021.
