Shearman & Sterling LLP | Financial Regulatory Developments Focus | International Body Issues Statement on Disclosure of Environmental, Social and Governance Matters
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  • International Body Issues Statement on Disclosure of Environmental, Social and Governance Matters
    01/18/2019
    The International Organization of Securities Commissions has issued a statement on the importance of issuers including environmental, social and governance matters when disclosing information material to investors’ decisions.

    Key points from the statement include:
    • Issuers’ disclosure of environmental, social and governance information in the market has increased in recent years, either on a voluntary basis or as a result of compulsory requirements at a local level. The information ranges from environmental factors related to sustainability and climate change, social factors including labor practices and diversity, to general governance-related factors that have a material impact on the issuer’s business.
    • However, IOSCO also observes that disclosure practices remain varied among issuers and between markets in terms of type of information disclosed and quality of information.
    • Investors’ interest in environmental, social and governance disclosure has grown, and some investors already significantly value ESG matters in their investment strategy, highlighting its importance in their investment and voting decisions.
    • At the same time, some investors have expressed desire for enhanced reliability and comparability of environmental, social and governance information and disclosures to facilitate a more accurate assessment of risk and, therefore, more informed investment decisions.
    • Various related interest groups and private sector bodies have developed disclosure frameworks that issuers may consider, designed to facilitate and guide issuers and improve comparability of disclosures.

    IOSCO continues to monitor developments in this area and the perspectives of different market participants, including investors, issuers and other stakeholders. IOSCO has also established a sustainable finance network of securities regulators to consider sustainability issues.

    View the statement

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    TOPIC: Securities