Securities regulators promoting sustainable finance, new UN report

24 October 2018

The latest report from the United Nations Sustainable Stock Exchanges (SSE) initiative outlines an action plan for regulators wishing to support the Sustainable Development Goals. With 35 examples from 19 markets, the report provides a snapshot of what is happening around the world today. The regulators report was released during the SSE Global Dialogue, which was held during UNCTAD’s 2018 World Investment Forum in Geneva, Switzerland on 23 October 2018.

Increasingly securities regulators around the world have demonstrated interest in the relationship between sustainability issues and their core mandates. Although securities regulators’ specific roles, responsibilities and authorities differ across jurisdictions, their objectives are generally to protect investors, to ensure that markets are fair, efficient and transparent, and to reduce systemic risk.

Sustainability issues can create financially material risks and opportunities for investors and may affect the resilience of the financial system as a whole. Because of this, sustainability issues and the policy responses to these issues are of direct relevance to securities regulators’ existing mandates. As an articulation of the world’s most pressing sustainability issues, the SDGs can be seen as an “ESG+” policy framework providing guidance for policy and markets in these areas.

Recognizing that there can be no one-size-fits-all approach, the report aims to facilitate the sharing of experiences, and presents a range of actions that are supplemented by examples of what securities regulators have already done to boost sustainable finance. An advisory group of nearly 70 capital market stakeholders globally – regulators, exchanges, investors – produced the report.

“In jurisdictions around the world, securities regulators are taking actions to support sustainable development, but we are facing the challenge of having to do much more to meet our global goals,” said James Zhan, Chairman of the SSE Board and Director of Investment and Enterprise at UNCTAD. “This report shows how securities regulators are beginning to recognize the urgency in which we must act, and provides an action plan to accelerate momentum.”

“We welcome this area of work from the SSE, as the work of security regulators is critical if we are to create a sustainable financial system that can contribute to the Sustainable Development Goals, while providing beneficiaries with a positive return on their investments. While we have seen a surge in much-needed regulation related to sustainability in recent years, in order for this regulation to be truly effective, we need to set more clear objectives and more integration with broader financial regulation. Through both the SSE and our own policy work at the PRI, we stand ready to support the work of security regulators in helping to create a truly sustainable financial system,” said Fiona Reynolds, CEO of Principles of Responsible Investment (PRI).

The Chair of the SSE Advisory Group on Securities Regulations and Executive Chairman of the Financial Regulatory Authority in Egypt, Dr. Mohammed Omran, said “this new SSE research provides a constructive framework and practical set of illustrative examples to help securities regulators further explore how they can encourage investment in sustainable development.”

“In this guidance, the SSE outlines key considerations for securities regulators and identifies areas in which they can most usefully focus their efforts to uphold their responsibilities as regulators while helping to align capital markets with the needs of the future via the SDGs,” said Mary L. Schapiro, 29th Chair of the U.S. Securities and Exchange Commission.

Learn more here and download the full report here.

Download the SSE 2018 Report on Progress here.

 

About the SSE

The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.