04.15.2020

Joint Associations Letter To ESMA On Climate Benchmarks

ISDA, along with the Association for Financial Markets in Europe, the European Federation of Energy Traders, the Association of European Energy Exchanges and the Futures Industry Association, sent a joint letter to the European Commission’s Executive Vice-President Valdis Dombrovskis and the European Securities and Markets Authority’s (ESMA) Chairman Steven Maijoor to express their concerns in relation to the requirement for benchmark administrators to comply with additional obligations set out in the Low Carbon Benchmarks Regulation.

The letter requests ESMA to consider publishing guidance to national competent authorities, setting out its expectation that they will not prioritize their supervisory actions in relation to implementation of the obligations under the Low Carbon Benchmarks Regulation until the level 2 measures have been finalized and administrators have had the opportunity to implement the level 2 measures.

Source: ISDA

IOSCO Publishes Report On Sustainable Finance and the Role of Securities Regulators

The Board of the International Organization of Securities Commissions today published its report on Sustainable Finance and the Role of Securities Regulators and IOSCO, which seeks to help market participants address issues related to sustainability and climate change.

The Sustainable Finance Network of IOSCO (SFN) prepared the report, which highlights three recurring themes that involve multiple and diverse sustainability frameworks and standards, including sustainability-related disclosure, a lack of common definitions of sustainable activities, and greenwashing and other challenges to investor protection.

The report indicates that many issuers and asset managers operating cross border may be subject to different regulatory regimes or participate in multiple regional or international third-party initiatives. This wide variety of regulatory regimes and initiatives, often with inconsistent objectives and requirements, may prevent stakeholders from fully understanding the risks and opportunities that sustainable business activities entail.

To inform its work, the SFN drew on a survey of the initiatives planned or undertaken by securities regulators and market participants to address the opportunities and challenges posed by sustainable finance. In reaching its conclusions, it also considered the discussion at its Stakeholders Meeting in June 2019 and the findings of the IOSCO Growth and Emerging Market Committee 2019 report on Sustainable finance in emerging markets and the role of securities regulators and the 2019 IOSCO Statement on Disclosure of ESG Matters by Issuers.

As a result of the SFN’s work, the IOSCO Board agreed in February 2020 to establish a Board-level Task Force on Sustainable Finance, aimed at enabling IOSCO to play a driving role in global efforts to address issues described in the report.

The IOSCO Board appointed Erik Thedéen, Director General of Finansinspektionen, Sweden, as chair of the Task Force. Its aim is three-fold: first, to improve sustainability-related disclosures made by issuers and asset managers; second, to work in collaboration with other international organizations and regulators to avoid duplicative efforts and to enhance coordination of relevant regulatory and supervisory approaches; and third, to prepare case studies and analyses of transparency, investor protection and other relevant issues within sustainable finance to illustrate the practical implications of its work.

Mr. Thedéen said “Global problems require global solutions; facilitating an orderly transition and simultaneously safeguarding the conditions for cross-border financial activity are important issues for financial firms and IOSCO’s members. One of our main objectives is to improve the quality of climate-related disclosures. We are looking forward to engaging with other relevant stakeholders and standard-setters to discuss the best approaches for taking this work forward.”

Source: IOSCO

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