(Geneva, 30 April 2018) The SSE convened members of an informal multi-stakeholder advisory group to deliberate on how securities regulators can support sustainable finance and the UN Sustainable Development Goals (SDGs). The advisory group consists of more than 50 participants including capital market regulators, stock exchanges, investors, civil society and thematic experts interested in evaluating how securities regulation can help the financial markets better align with the SDGs.
“The market has moved far ahead of securities regulators in terms of sustainable finance instruments, so there is a need to catch up,” said Dr. Mohammed Omran, Chairman of the Financial Regulatory Authority of Egypt, and Chair of the SSE Securities Regulators Advisory Group. “It is clear to many of us in the regulatory community that environmental, social and governance issues have direct implications on our core mandates of investor protection and market stability. Sustainability factors are considered material issues by many investors and stock exchanges and it’s time that securities regulators looked more closely at how we treat these issues.”
“The UN Sustainable Development Goals is a driving force behind sustainable finance,” said James Zhan, Director of UNCTAD’s Investment and Enterprise Division. “Five years ago our World Investment Report outlined the massive investment gap of 5 to 7 trillion dollars per year that needs to be filled if we are to achieve the SDGs. Since that time, we’ve seen a dramatic expansion of sustainable finance mechanisms. Securities regulators play a critical role in the overall investment chain, so it’s important to engage them in a multi-stakeholder endeavour to expand investment in this area.”
The SSE’s engagement with capital market regulators aims to facilitate the sharing of experiences between countries on mechanisms to improve the availability and quality of corporate environmental, social and governance (ESG) information and related sustainable finance mechanisms including green bonds and ESG themed equity indices. The SSE’s work in this area includes participation in the International Organization of Securities Commissions (IOSCO) Africa and Middle East Regional Committee Annual Conference held in January 2018, and a joint IOSCO-World Bank meeting to be held in Malaysia in May 2018.
Members of the SSE advisory group expressed a need for more action among securities regulators to evaluate the current sustainability-related developments in financial markets, including the recommendations on ESG integration and reporting produced by the Financial Stability Board’s Task-force on Climate-related Financial Disclosures. The advisory group highlighted the importance of the SSE project for assisting financial authorities engaging with environmental and social risk factors in their markets, as well as informing broader international discussions among securities regulators.
There were eight securities regulators represented at the meeting in Geneva, from Australia, Brazil, Egypt, Kenya, Morocco, the Netherlands and the United Kingdom. In addition, the London and Luxembourg stock exchanges, investors and subject-matter experts joined the meeting on 30 April. The advisory group is now reviewing a zero draft of a document aimed at sharing experiences among capital market authorities in supporting the SDGs. The final report will be launched at the SSE Global Dialogue on 23 October in Geneva, as part of the UNCTAD World Investment Forum.
