A global values watchdog plans to publish its first regulatory guide for companies assessing the benefits of the corporate, social and governance environment (ESG).
A global watchdog judge plans to release its first regulatory guide for environmental, social and governance performance (ESG) assessors in July to address growing concern among asset managers for exaggerated green credentials.
Concern for the so-called green washing is growing as more investment is channeled into climate-friendly funds, giving rise to a growing market for assessments on how different companies are addressing ESG challenges.
Ashley Alder, president of the IOSCO body that brings together securities regulators from the United States, Europe and Asia, says many countries do not have rules for ESG assessors.
“Many buying and selling parties have signaled very clearly how confusing the multiplicity of ESG assessment choices can be, while also raising serious questions about relevance, reliability and green washing,” Alder said in a statement. City & Financial at the City Week event on Wednesday. .
“We are now working on ways to ensure better transparency and clearer definitions. Our work is likely to involve guidance to service providers and rating agencies, along with recommendations for regulators on how to deal with them.” potential conflicts of interest “.
IOSCO – the International Organization for Security Commission – expects to publish a report in mid-July.
The watchdog also wants asset managers to incorporate more significant climate considerations into their risk management as the companies in which they invest are more ESG disclosure rules.
“It is critical to provide quality information to end investors,” Alder said.
IOSCO is working with the International Foundation for Financial Reporting (IFRS) on the creation of a new body from November to draft mandatory global standards for the dissemination of companies on climate change.
IOSCO members such as the United States and the European Union will continue to work on their disclosure rules, creating some differences, Alder said.
It is essential, therefore, that these national approaches become interoperable with the global base developed by IFRS to avoid conflicts and create more “rumors” in the system, Alder added.
“We can’t just work in jurisdictional silos when the climate emergency doesn’t respect national borders,” he said. “Global investors need global comparability”