By Will Martindale (@WillJMartindale), Director of Policy and Research
2019 was the year responsible investment policy mattered. Here is a selection of 2019 highlights:
- The France AMF published a roadmap on sustainable finance continuing French leadership in sustainable finance.
- The International Organisation of Securities Commissioners (IOSCO) published a consultation on sustainable finance in emerging markets and the role of securities regulators – a first for IOSCO.
- The EU ESMA opened consultations on integration of sustainability issues in securities and investment fund legislation.
- The EU reached political agreement on investor disclosures and low-carbon benchmarks regulation, first issued in May 2018. This was a PRI priority and confirms that ESG integration is a requirement.
- The Australian Sustainable Finance Initiative launched.
- The US House Financial Services Committee subcommittee held two hearings on ESG disclosure – a first for Congress.
- The Japan FSA appointed a Chief Sustainable Finance Officer.
- The Dutch Central Bank signed as a PRI signatory.
- The Network for Greening of the Financial System (NGFS) published their first report, A call for action: climate change as a source of financial risk, which sets out recommendations to Central Banks and Supervisors.
- The UK FCA opened a consultation on expanding the remit of Independent Governance Committees (IGCs) to look at material ESG issues, stewardship and member views – technical but important work.
- The Hong Kong Stock Exchange consulted on ESG disclosures.
- The Canadian Expert Panel on Sustainable Finance launched its final report with Bill Morneau, Canada’s Minister of Finance.
- Following the UK’s commitment in law to net zero greenhouse gas emissions by 2050 at the latest, the UK’s Treasury Select Committee held a hearing on the necessary policy change.
- The UK published its Green Finance Strategy, which includes an expectation of TCFD reporting by certain investors and issuers by 2022.
- The US House Committee on Financial Services voted to pass several ESG disclosure bills, including the Climate Risk Disclosure Act of 2019 (CRDA).
- The Asset Management Association of China (AMAC) consulted on its draft for its Guidelines on Green Investment.
- The China Securities Regulator (CSRC) published a strategy for establishing mutual funds’ values development.
- The New Zealand government opened a consultation reviewing the role of responsible investment in default defined contribution pension plans.
- Speaking at PRI In Person, French finance minister Bruno Le Maire said: “We need a new capitalism for the 21st century which would be more sustainable.”
- The PRI hosted its first dedicated responsible investment policy conference. Watch the highlights. The PRI published its Inevitable Policy Response policy forecast.
- The French AMF announced the composition of its climate and sustainable finance commission.
- Binding rules for UK pension funds to consider material ESG issues came into effect. The Minister for Pensions wrote to the 50 largest pension funds asking them what they are doing in this area and that some funds should stop “shuffling their feet” on climate change.
- The UK FCA published its response to a consultation on climate change and green finance, committing to challenge firms on greenwashing and clarifying that existing rules require regulated firms to disclose all financially material climate-related risks.
- The UK FRC released its revised Stewardship Code, emphasising the importance of action on systemic risks and alignment with beneficiaries’ and clients’ views.
- The EU and representatives from Argentina, Canada, Chile, China, India, Kenya and Morocco launched a new International Platform on Sustainable Finance (IPSF) at the World Bank meetings in Washington DC. Other countries are inviting to join.
- Russia’s Central Bank and supervisor drafted a Stewardship Code.
- Singapore and Malaysia’s financial regulators published green finance action plans.
- The European Investment Bank committed to stop financing fossil fuels from the end of 2021.
- The International Organisation of Pension Supervisors (IOPS) published guidelines on ESG integration by pension funds.
- In a setback for responsible investment policy, the US SEC published proposals that undermine the shareholder resolution process. Sign the PRI’s letter.
- The PRI, UNEP FI and The Generation Foundation published a final report on fiduciary duty. Watch the video. Law firm Freshfields announced as partner for Legal Framework for Impact.
- The EU published its green deal, setting out proposed policy change to achieve net zero by 2050.
- EU policy makers achieved political agreement on the EU taxonomy.
2019 may be the year that policy mattered – but it’s only the start. Put simply, capital markets continue to operate beyond sustainability boundaries. Can investors expert further policymaking in the months and years ahead? Let’s hope so.
This blog is written by PRI staff members and guest contributors. Our goal is to contribute to the broader debate around topical issues and to help showcase some of our research and other work that we undertake in support of our signatories.
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