IOSCO Recommends Sustainability-Related Practices in Asset Management

IOSCO requested feedback on proposed recommendations for sustainability-related asset management practices. In the consultation report, IOSCO recommended that securities regulators:

• set regulatory and supervisory expectations for asset managers as to sustainability-related practices and related disclosures;

• improve product-level disclosure by expanding on existing regulatory requirements or creating new ones;

• have supervisory and enforcement tools to ensure compliance by asset managers and to address breaches;

• encourage the development of common sustainable finance-related terms and definitions; and

• promote sustainability-related investor education initiatives.

Additionally, in a final report on corporate issuers' sustainability-related disclosures, IOSCO outlined its Sustainable Finance Task Force's next steps. Among them are:

• monitoring the International Financial Reporting Standards ("IFRS") Foundation's work towards the establishment of the International Sustainability Standards Board ("ISSB");

• (i) "considering market acceptance of the ISSB’s future standards" and (ii) "setting a pathway for the ISSB’s sustainability reporting standards to serve as the baseline for consistent and comparable approaches to mandatory sustainability-related disclosures across jurisdictions, in light of domestic legal frameworks";

• influencing the development of an audit and assurance framework for corporate sustainability-related disclosures; and

• overseeing the transition to the "steady state" for IFRS sustainability-related financial reporting standards, including the expansion of the scope of the ISSB's standards beyond climate change.