RegTech Insight Brief
ISSB Nails Down Technicalities of Standards for June Release
The International Sustainability Standards Board (ISSB) has completed the technical drafting of global reporting standards it plans to make effective for signatories in January. The technical details of the framework have been partly based on the European Sustainability Reporting Standards (ESRS). They are due to be announced in June and the first disclosures by companies reporting under them will be due in 2025.
SEC’s Gensler Says Regulator is Considering Climate Proposals
The Securities and Exchange Commission (SEC) in the US is mulling the alteration of some of its climate-reporting proposals, which were announced last year. Chair of the regulator Gary Gensler said about 15,000 comments had been sent from market participants after the proposals were put out for consultation. Gensler said the adjustments were being considered to bring “consistency and comparability to disclosures”.
French Regulator Wants Tougher Guarantees in SFDR
The French financial regulator, Autorité des Marchés Financiers (AMF), has urged a rethink of part of the European Union’s wide-ranging ESG reporting rules. The AMF wants to see minimal environmental impact standards for ESG-linked funds, arguing that without them, the Sustainable Finance Disclosure Regulation (SFDR) would inadvertently encourage greenwashing.
PRI Aligns Reporting Framework with that of TCFD
A pioneering sustainable investment disclosures organisation has made widescale changes to its reporting framework, amid calls that it fall in line with other reporting bodies. The United Nations-backed Principles for Responsible Investing (PRI) has loosened some of the reporting requirements that make its disclosures framework the largest in the industry. PRI signatories will now be asked to follow a framework more closely aligned with that of the Taskforce on Climate-related Financial Disclosures (TCFD).
European Regulators Give Backing to Planned CSRD Reporting Rules
Europe’s three main financial regulators have given conditional backing to the European Union’s proposed Corporates Sustainable Reporting Directive (CSRD), which will govern how companies disclose their ESG performance. The European Banking Authority (EBA), The European Insurance and Occupational Pensions Authority (EIOPA), and The European Securities and Markets Authority (ESMA) said the rules – termed European Sustainability Reporting Standards (ESRS) –needed to align with other global reporting standards.
ISSB to Announce Reporting Framework in June
The International Sustainability Standards Board (ISSB) has said it will announce its ESG reporting framework in June. Erkki Liikanen, chair of the IFRS Foundation – under which the board operates – told the World Economic Forum’s annual gathering in Davos, Switzerland, that he expected the sustainability and climate-related reporting framework to be published “at tremendous speed” because “there is such urgency”. A meeting of the board earlier said it would allow companies exemptions from reporting some ESG data if the cost of gathering and disclosing it would damage them commercially.
Switzerland Proposes Green Labelling Rules
Switzerland has proposed new rules covering the labelling of sustainable financial products traded in the Alpine nation’s markets. The Swiss Federal Council said it will require issuers of the products to be able to justify the use of descriptive terms such as “green” and “ESG”. Among other requirements, the council proposes that issuers include disclosures on their products’ approach to sustainability and provide third-party verification of their credibility.
IFRS to Open China Office as Asia Base for ISSB
The IFRS Foundation has signed an agreement to open an office in China from which it will base Asian operations of the International Sustainability Standards Board (ISSB). The three-year memorandum of understanding was signed with the Chinese Ministry of Finance and will initially be the office of ISSB member Bing Leng. “The announcement of the Beijing office is an important step towards the establishment of our global footprint in the ISSB’s inaugural year,” said ISSB chair Emmanuel Faber.
Australia Announces Plans for Mandatory ESG Disclosures by 2024
Australia has become the latest country to announce it is drawing up plans for mandatory ESG reporting by financial institutions and corporates. A consultation plan was issued by the government Treasury, with a framework proposal expected and a phased implementation from 2024. It follows similar announcements this year by the US and UK.
HK Companies Urged to Prepare for TCFD, ISSB Reporting Rules
Listed companies in Hong Kong should start planning and installing the technology and data provisions to meet more stringent disclosure rules, the city’s Stock Exchange has said. The HKSE is in the process of formulating reporting rules in line with the Taskforce on Climate-related Financial Disclosures (TCFD) and International Sustainability Standards Board (ISSB) frameworks.