IOSCO statement on disclosure of ESG matters by issuers

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21 Jan 2019

The International Organization of Securities Commissions (IOSCO) has published a statement setting out the importance for issuers of considering the inclusion of environmental, social and governance (ESG) matters when disclosing information material to investors' decisions.

The statement notes that IOSCO Principle 16 states that issuers should provide full, accurate, and timely disclosure of financial results, risk, and other information which is material to investors’ decisions. In this context, the IOSCO statement emphasises that ESG matters, though sometimes characterised as non-financial, may have a material short-term and long-term impact on the business operations of the issuers as well as on risks and returns for investors and their investment and voting decisions. Therefore, statement notes:

IOSCO encourages issuers to consider the materiality of ESG matters to their business and to assess risks and opportunities in light of their business strategy and risk assessment methodology. When ESG matters are considered to be material, issuers should disclose the impact or potential impact on their financial performance and value creation. In doing so, issuers also are encouraged to give insight into the governance and oversight of ESG-related material risks.

Please click to access the full statement on the IOSCO website.

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