Markets Are Failing Investors on Sustainability: Mother of All Market Regulators

By Mathew Carr

Feb. 25, 2021 — LONDON: The mother of all market regulators says global markets are in a mess on sustainability.

Investors wanting clear disclosure on the climate and natural-environment impact of the bonds and shares they buy are not being well served, the International Organization of Securities Commissions said yesterday.

“Companies often report sustainability-related information selectively, referencing different frameworks,” the organization said in a statement on its website:
https://www.iosco.org/news/pdf/IOSCONEWS594.pdf

IOSCO said there was an “urgent need” for globally consistent, comparable and reliable sustainability disclosure standards.

On the same day, the Division of Corporation Finance of the Securities Exchange Commission was ordered to enhance its focus on climate-related disclosure in public company filings. SEC staffers “will review the extent to which public companies address the topics identified in the 2010 guidance,” said Acting Chair of the SEC Allison Herren Lee.
See this: https://www.sec.gov/news/public-statement/lee-statement-review-climate-related-disclosure

Allison Herren Lee

At the end of 2020 various organisations jointly released a ‘prototype’ climate financial disclosure standard “cobbled together in some haste from existing offerings,” according to this column in Responsible Investor from last month:
https://www.responsible-investor.com/articles/a-prototype-climate-disclosure-standard-with-a-flawed-conceptual-framework

The landscape is acronym city.

“Whilst anyone familiar with Taskforce on Climate-related Financial Disclosures (TCFD), integrated reporting and the Global Reporting Initiative (GRI) Standards is likely to be favourably disposed to the proposed reporting requirements, the conceptual framework underpinning them is flawed,” said Carol Adams, Professor of Accounting at Durham University Business School and technical expert to the UNDP’s Sustainable Development Goal Impact Team..

Instead of simply making polluters pay, regulators are getting caught up in this sort of stuff (I’m not claiming it’s easy — check out of the chart on the last page of this): https://29kjwb3armds2g3gi4lq2sx1-wpengine.netdna-ssl.com/wp-content/uploads/Reporting-on-enterprise-value_climate-prototype_Dec20.pdf

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