ISS ESG Launches Global Regulatory Initiatives Comparative Report

ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc. (ISS), today released a timely new report, The Depth And Breadth of Regulatory Initiatives Across Regions. The new report identifies six key topic areas in sustainable financial regulation – taxonomies; product standards, disclosures and labelling; management and disclosure of climate risks; management and disclosure of ESG risks; ESG in stewardship; and green bond guidelines. It provides a global comparative analysis, leveraging its proprietary ISS ESG Regulation Depth and Breadth Index, to assess the number and breadth of initiatives implemented to date, as well as a qualitative summary of initiatives, by region and country.

Key findings include that Sustainable Finance regulation has developed significantly both in depth and in breadth across the globe and that while Europe is still the frontrunner, other regions, especially Asia, are catching up. The most widely used regulatory initiatives so far are green bond guidelines, with, often connected, national and regional taxonomies coming in second. 

The report highlights International Monetary Fund (IMF) Global Financial Stability Report analysis of the role the investment fund sector can play globally to support the transition to a green economy. Although assets in sustainable investment funds have doubled over the past four years, an estimated $20 trillion in new investments will be required by 2050 to achieve worldwide Net Zero goals.

Dr. Maximilian Horster, Head of ISS ESG said: “This timely new report provides a helpful comparative snapshot of the current state of global Sustainable Finance regulatory initiatives and related objectives. Regulation plays an important role in promoting sustainability and fostering economic growth, while ensuring proper ESG risk management and preventing greenwashing.”

Download a copy of the report here.