The International Organization of Securities Commissions (IOSCO), the global standard setter for securities market regulation, actively engaged on its sustainable finance agenda, delivering over 30 speeches and participating at various events with the global regulatory and financial community.
IOSCO laid out its strategic priorities which best represent the collective view of its 130 members around the world. These include capacity building efforts in relation to the IFRS Sustainability Disclosure Standards and further work on a global assurance framework for sustainability-related corporate reporting, transition plans and financial integrity in voluntary carbon markets (VCMs).
Sustainability-related corporate reporting: ISSB Disclosures, Assurance and Transition Plans
Having recently endorsed the inaugural sustainability disclosure standards of the International Sustainability Standards Board (ISSB), IOSCO announced it would support the adoption and implementation considerations of its members and collaborate with global stakeholders to deliver a sound capacity building program. These announcements were made by IOSCO Chairman Jean-Paul Servais, also Chair of the Belgium FSMA, and Sustainable Finance Task Force Chair Rodrigo Buenaventura, also Chair of the Spain CNMV, at events organized jointly by IOSCO and the ISSB with the audit community.
Beyond implementation and capacity building, Jean-Paul Servais stressed the need for accessibility of data, during the launch of the Climate Data Steering Committee’s Net Zero Data Public Utility (NZDPU) Proof of Concept introduced by Michael Bloomberg and President Emmanuel Macron.
“In today’s digitized and globalized world, high-quality and accessible climate data have a pivotal role to play”, he said. “Since IOSCO endorsed the ISSB first standards, we are pleased to see that the first version of the NZDPU core data model builds on this framework; we will continue to encourage their implementation and use globally.”
COP28 also provided IOSCO the opportunity to underline the need for assurance of sustainability reporting. IOSCO welcomed the International Auditing and Assurance Standards Board (IAASB)’s consultation on the Proposed International Standard on Sustainability Assurance (ISSA) 5000 and published a statement setting out its views on the consultation. With a consultation on ethics and independence standards for sustainability assurance engagements expected in January 2024 from the International Ethics Standards Board for Accountants (IESBA), IOSCO will continue to engage proactively with both boards on this journey.
IOSCO participated actively at several events on the role of transition plans, including a UN Secretary-General Event on the “High-Level Expert Group report Integrity Matters” and a FSB- GFANZ High-level roundtable on “Net-zero transition planning”. At those events, IOSCO highlighted its proposed work which will examine how proper disclosure of existing transition plans by listed companies and asset managers with transition targets can work for the benefit of investors.
Transparent and orderly Voluntary Carbon Markets
IOSCO’s publication of its Consultation Report on Voluntary Carbon Markets (VCMs) represents a first step in setting out a proposal which will contribute to Good Practices to promote financial integrity in these markets. The discussion at IOSCO’s launch event in the Spain Pavilion at COP28 considered the state of VCMs and the role of financial regulators in these markets. The consultation is open until 3 March 2024 and IOSCO calls on stakeholders to engage in this timely and important work. The consultation was welcomed during the COP28 Presidency roundtable on “Unlocking High Integrity Carbon Markets, that featured addresses from leaders of multilateral institutions and senior representation from countries committed to building and supporting the scaling of high-integrity carbon markets.
Supervisory Practices on Asset Management and ESG Ratings and Data Product Providers
To bring greater visibility to the role that regulators are playing in addressing greenwashing, IOSCO published a new report which includes a mapping of the regulatory and supervisory approaches and practices (current or planned) by regulators in the oversight of asset management and ESG rating and data product providers, including challenges and data gaps hindering the implementation of relevant IOSCO recommendations.
