Creating long-term value requires a sustainable global financial system
As awareness of sustainability’s importance to financial systems has grown, recent years have seen the proliferation of sustainable finance expert groups around the world. Supporting these national and regional partnerships of investors and policy makers has been a key part of our work to create a more sustainable financial system.
The best known of these initiatives is the European Commission’s. Having been an international observer to the High-Level Expert Group (HLEG) on sustainable finance, which delivered its recommendations in January 2018, we have been working as a key member of its successor, the Technical Expert Group (TEG) tasked with developing: a taxonomy for whether an economic activity is environmentally sustainable, a green bond standard, methodologies for climate benchmarks and guidance to improve corporate disclosure.
In January 2019, we responded to a consultation from the Canadian Expert Panel on Sustainable Finance, and supported the research process with a survey of PRI signatories. In Australia, we have provided climate and policy expertise to the Australasian Sustainable Finance Initiative since its formation in March 2019.
Shareholder rights in the US
Our US policy priority is to protect investors’ rights to engage the companies they own on ESG matters through the shareholder proposal process. Rule changes under consideration would dramatically increase the value of shares investors must own to be eligible to submit a proposal, or the portion of the vote a proposal must win to be resubmitted in subsequent years. Further changes under consideration by the SEC would impose onerous regulations on proxy advisory firms.
In October 2018, we supported an SEC petition from a group of institutional investors (managing more than US$5 trillion) and professors, urging the Commission to develop a comprehensive framework requiring issuers to disclose identified ESG aspects of each public-reporting company’s operations.
Global policy engagement programme
We continues to engage with policy makers around the world, with a particular focus in the last year on the US, European Union, China and the UK.