Environmental, social and governance (ESG), and especially climate, is now one of the dominant themes for global regulators and progress has accelerated at an astonishingly rapid pace this year.
There is a growing consensus that, amongst other things, climate change poses significant financial risks and that urgent, coordinated action is required to address them.
The EU’s green finance agenda is ambitious, multi-faceted and increasingly sophisticated. But Europe only accounts for about 8.4% of global carbon emissions. It is evident that if climate considerations are to be properly taken into account throughout the investment chain, we will at the very least need globally consistent corporate-level reporting standards.
Although equivalence can be a technique to export some EU financial sector standards internationally, it cannot operate in the same way for non-financial corporations for the simple reason that they are not subject to the gamut of bank and market regulations where equivalence normally sits. So global standards have an inevitably vital role to play.
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