Jean-Paul Servais, Chairman of the FSMA and Chair of the Board of the International Organization of Securities Commissions (IOSCO), today outlined at the Climate Change Conference in Sharm El-Sheikh (COP27) the initiatives IOSCO is undertaking to enhance sustainability disclosures by companies, promote well-functioning carbon markets, and address greenwashing in financial markets.
Sustainability disclosure standards
Disclosure of company information underpins valuations in financial markets. Sustainability disclosures will, in future, play a similar role. IOSCO expects companies to be able, from the end of 2024 onwards, to draw on sustainability disclosure standards.
The International Sustainability Standards Board (ISSB), whose creation was announced in 2021 at the Climate Change Conference in Glasgow (COP26), is working on developing international standards for sustainability disclosures.
‘In 2023, the ISSB will issue its standard for climate-related disclosures and general sustainability requirements. IOSCO will move promptly to decide on a possbiel endorsement”, according to Jean-Paul Servais, Chair of the IOSCO Board. “If IOSCO endorses the standards, it will develop a support programme for its members to assist them in moving forward immediately.”
Interoperability around the world of climate-related disclosure standards will be an important factor in IOSCO’s decision to endorse them, Jean-Paul Servais emphasized.
The Chairman of the FSMA and IOSCO Chair took part in and spoke at several panels attended by ministers and other top officials at the Climate Conference in Sharm El-Sheikh.
Fair and efficient carbon markets
The Chair of the IOSCO Board also stressed the importance of well-functioning carbon markets. "Carbon markets have major role to play in moving us to net zero, but they must be made efficient, liquid and free from conflicts of interest and undue political interference”, he stated.
In order to reach this goal, IOSCO today published a consultation paper setting out its recommendations on how to establish sound and well-functioning carbon markets. It accompanied this with a discussion paper seeking stakeholders views on the role that could be played by financial market regulators in this regard.
Addressing greenwashing in the financial markets
Greenwashing is the practice of incorrectly presenting investments as sustainable. Countering this phenomenon is, according to IOSCO, essential in order to ensure investors’ trust in sustainable finance. It is for this reason that addressing greenwashing is one of IOSCO’s priorities.
IOSCO called upon all associations operating in the financial markets to promote specific good practices among their members to counter the risk of greenwashing on the part of asset managers and ESG rating and data providers.
Voluntary initiatives have thus far played an important role in building the foundations of well- functioning sustainable financial markets. However, IOSCO believes that their actions are no longer sufficient. Governments and regulatory authorities must take further measures. IOSCO will work with its members to help build sound and well-functioning sustainable finance markets.
Read also the press release published by IOSCO.
