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Recent sustainability and integrated reporting developments

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09 Jul 2019

A summary of recent developments at IOSCO, UNCTAD/IIRC, IIRC, ANC, the UK Government, METI, JPX, ECA, and the EC.

The Growth and Emerging Market Committee (GEMC) of the International Organization of Securities Commissions (IOSCO) has published a report Sustainable finance in emerging markets and the role of securities regulators, which provides 10 recommendations for emerging market member jurisdictions to consider when issuing regulations or guidance regarding sustainable financial instruments. Among other things, the recommendations include requirements for reporting and disclosure of material Environmental, Social and Governance (ESG) specific risks, aimed at enhancing transparency. Please plick to access the report on the IOSCO website.

The United Nations Conference on Trade and Development (UNCTAD) and the International Integrated Reporting Council (IIRC) have signed an updated Memorandum of Understanding to reaffirm their commitment to integrating the United Nation’s Sustainable Development Goals (SDGs) into the corporate reporting cycle. Please click to access the press release on the IIRC website.

The IIRC has announced that its Chief Executive Officer Richard Howitt has stepped down after nearly three years’ service. Charles Tilley OBE has been appointed interim CEO. For more information, please see the press release on the IIRC website.

The Autorité des Normes Comptables (ANC), the French standard-setter, has released a report analysing ways of consolidating the development of extra-financial reporting by companies, so that, in the long run, it gradually takes on a status comparable to that of financial information. The report aims to define the conditions for the development of high-quality extra-financial information. In addition, the report aims to encourage greater harmonisation and comparability of extra-financial information. After an overview of the various existing standards and initiatives, the report assesses the relevance of extra-financial information in terms of quality, reliability, presentation, implementation cost and verifiability, as well as its association with financial data. Please click to access the report on the ANC website.

The UK Government has launched its first Green Finance Strategy, outlining a wide range of actions to support financial system that supports and reaps the opportunities of a low-carbon and environmentally sustainable economy. In response, the Financial Reporting Council (FRC) has issued a joint statement with other financial regulators, including the Prudential Regulation Authority (PRA), Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) welcoming the strategy.

The Japanese Ministry of Economy, Trade and Industry (METI) has announced the inauguration of a new body called the “TCFD Consortium” as an opportunity for holding discussions on effective corporate information disclosure and efforts for leading disclosed information to appropriate decision making on investment by financial institutes and other entities. The Meti itself, the Financial Services Agency (FSA) and the Ministry of the Environment (MOE) will participate in the consortium as observers. Please click for more information on the METI website.

The Japan Exchange Group (JPX) has published a Japanese translation of the SSE Model Guidance on reporting ESG information to investors and encourages listed companies to make use of this resource. Please click to access the press release and the translation on the SSE website.

The European Court of Auditors (ECA) has published a review taking stock of the status of reporting on the achievement of the SDGs and sustainability at EU level as well as reporting by individual EU institutions and agencies. There is no specific legal obligation for the Commission or other EU institutions to produce sustainability reports. However, since the EU has committed itself to the SDGs and to achieving sustainable development in general, sustainability reporting would be expected to be an integral part of reporting on performance and results. Please click to access the report on the ECA website.

The European Commission welcomes the latest step to drive forward sustainable finance in the EU, with the launch of a call for feedback on a classification system – or “taxonomy” – for environmentally-sustainable economic activities. The consultation is being launched by the Technical Expert Group (TEG) on Sustainable Finance.

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