Calvert, Newton Investment Management and GAM Investments are among investment firms supporting a call from PRI for more uniformity in sustainability standards.
Today, 65 companies, investors and professional accounting firms endorsed a statement developed by the Principles for Responsible Investment. Those groups include the World Business Council for Sustainable Development and International Federation of Accountants – which combined represent $121.3trn in assets under management. The PRI statement calls for better alignment between how different regulatory bodies around the world are asking for sustainability to be reported.
The statement said it recognizes the efforts made by the International Sustainability Standards Board (ISSB), the US Securities and Exchange Commission, and the European Commission together with the European Financial Reporting Advisory Group, to address the need to enhance and evolve corporate reporting to include and consider sustainability information.
The ISSB, which was set up at COP26 in Glasgow last November, recently closed its consultation for feedback on its draft disclosure requirements. This was followed by a call from asset owners to go further to “ensure the consistency and appropriate granularity of disclosures, even for a global baseline.”
The SEC has also invited industry feedback on sustainability disclosure proposals. Those include an update to 2001 regulation to prohibit companies from putting a badge on products that don’t use factors in their name as primary ones in their investment processes, including ESG. It would also put funds into three different groups and require environmentally focused funds to report greenhouse gas emissions tied to their portfolios.
In light of different efforts being taken by regulatory bodies around the world, the recent PRI statement said, “current draft standards and initiatives are not technically compatible in terms of concepts, terminologies and metrics.”
It added that as these different sustainability-related disclosure requirements are refined and finalized, “we call for each initiative to pointedly avoid regulatory and standard-setting fragmentation by aligning key concepts, terminologies and metrics on which disclosure requirements are built.”
Therefore, the statement calls for a comprehensive global baseline of sustainability disclosures, which it said for investors would better allow for truly sustainable investment decisions.
The full list of firms endorsing the statement can be found here.
