We have recently engaged in the development of international standards on green bonds and climate finance. Primarily targeting financial institutions, these standards will lay down the conditions to make an investment “green” and to measure the contribution of an investment to climate objectives.
The objective of ECOS’ involvement in this work is threefold:
- to ensure that investments are only considered “green” or “contributing to climate objectives” if their environmental benefits are high and unequivocally measurable so as to avoid any possibility of greenwashing;
- to contribute to developing standards which support a more transparent and open financial system in order to increase the social acceptability of the developed standards;
- to promote synergies between the work undertaken within ISO and the EU regarding sustainable finance
In parallel to the development of international standards within ISO, sustainable finance is also being tackled by the European Union, with the European Commission publishing its Action Plan for Sustainable Growth on 8 March 2018, as well as adopting the Sustainable Finance Legislative Package on 24 May 2018.
This package includes, among other things:
- a framework for a unified EU classification system (‘taxonomy’) that intends to clarify what is an environmentally sustainable activity and criteria to identify such activity. This would be the basis for the development of standards and labels for sustainable financial products.
- a part on investors’ duties and disclosures giving guidance to asset managers & institutional investors for integrating environmental, social and governance (ESG) factors in their investment decisions, and for disclosing their investments with relation to these factors.
For more information on our work on sustainable finance, please contact Mathilde Crêpy.