IMPROVING INTEGRITY FOR PRIVATE SECTOR FINANCE
5.1
How IOSCO is supporting trust in capital markets to drive sustainability
Through supporting our mem- bers, ensuring the continued soundness of capital markets and a range of other actions, the International Organization of Securities Commissions hopes to help pave the way to a low- carbon future. Jean-Paul Servais, board chair, International Organization of Securities Commissions
L ike so many times in mod- ern history and the history of financial markets, we are liv- ing through a truly challenging set of circumstances. However, unlike many times so far, we have a clear idea of what needs to be done to make them better, and a recognition that any potential progress requires global dialogue, systemic solutions and rapid action. There are clear objectives ahead for the global community. The financial sector is helping the transition to a more equitable low-carbon future work in a just, trustworthy and timely way. The International Organization of Security Commissions takes the respon- sibility for action from our unique position as the international stand- ard setter for capital markets where, together with the G20 and the Finan- cial Stability Board, we set the global regulatory reform agenda for financial markets. In our own domain, trust is a key con- sideration in ensuring markets work with integrity, investors are safe from harm and the overall financial system is both stable and able to respond to emerg- ing and evolving risks. Trust sits at the core of every initiative, every global policy proposal and every implementa- tion effort, regardless of whether we are thinking about large or retail investors, financial power or the geographic loca- tion of our members. Sustainable finance is no exception. The power of capital markets and the financial resources they convene could play an important part in finding the
global finance needed for a sound transi- tion while also spurring innovation and catalysing change. Our members jointly oversee approxi- mately95%oftheworld’scapitalmarkets. Many are based in emerging markets – those at most risk when it comes to cli- mate change and that require the most assistance along the way. Led by the priorities of our members, we have spent recent years working to ensure the continued soundness of capital markets as they seek to embed sustainability-related considerations throughout. Our work in sustainable finance was built on our core objectives and aims to bring sufficient trust and integrity into the market so investors can make informed decisions about their capi- tal allocation, all while knowing the chances of being subject to greenwash- ing or other mispractices are mitigated. We focus on several key aspects: data and transparency, practices for those who process, repackage or use this data to create products and sell them to oth- ers, or, more foundationally, market structures where all the trading takes place. To ensure that sound frameworks and practices exist in each, we engage on all fronts, from corporate report- ing (sustainability-related disclosure, assurance and ethics and disclosure of transition plans, where they exist) to environmental, social and governance ratings and data providers, over asset management to carbon markets and innovation in financial products and benchmarks.
THE POWER OF CAPITAL MARKETS AND THE FINANCIAL RESOURCES THEY CONVENE COULD PLAY AN IMPORTANT PART IN FINDING THE GLOBAL FINANCE NEEDED FOR A SOUND TRANSITION WHILE ALSO SPURRING INNOVATION AND CATALYSING CHANGE.
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Financing a Just Transition
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