ISLA’s sustainability council calls for global consistency on ESG guidance
20 May 2020 London
Image: Rawpixel.com/Shutterstock.com
The International Securities Lending Association’s Council for Sustainable Finance (ICSF) is calling for holistic guidance on any measures that may “significantly affect sustainable securities lending”.
The council’s efforts come in the form of its second position paper 'Reinforcing Global Sustainable Finance by Improving Guidance on Securities Lending', where it seeks to move beyond discussions of short selling that have been one of its main focuses until now.
ICSF’s first paper presented a plethora of academic evidence that the bans on short selling that came in the wake of the COVID-19 market disruption in March were not fit for purpose. The bans in Europe have since been lifted.
In its new paper, ICSF continues to shine the spotlight on the issues that arise from global inconsistencies in how national regulators are interpreting and applying rules on sustainable financing.
To remove this hurdle, the council seeks to create guidelines that would serve to establish a “consistent global approach” to various measures that may impact upon sustainable securities lending.
ICSF recommends that measures be evidenced-based, proportional, aligned with its voluntary guidelines for securities lending participants, known as its Principles for Sustainable Securities Lending.
The process of creating the guidance, ICSF says, should involve informing the key stakeholders regularly about the market participants’ behaviour, and (crucially) be subject to continuous review.
To further this aim, ICSF aims to convene an initial roundtable “in the near future” that will contribute to its ambition of creating a forum to discuss sustainability in securities lending, and is calling on ISLA members to voice their interests in contributing.
The council’s efforts come in the form of its second position paper 'Reinforcing Global Sustainable Finance by Improving Guidance on Securities Lending', where it seeks to move beyond discussions of short selling that have been one of its main focuses until now.
ICSF’s first paper presented a plethora of academic evidence that the bans on short selling that came in the wake of the COVID-19 market disruption in March were not fit for purpose. The bans in Europe have since been lifted.
In its new paper, ICSF continues to shine the spotlight on the issues that arise from global inconsistencies in how national regulators are interpreting and applying rules on sustainable financing.
To remove this hurdle, the council seeks to create guidelines that would serve to establish a “consistent global approach” to various measures that may impact upon sustainable securities lending.
ICSF recommends that measures be evidenced-based, proportional, aligned with its voluntary guidelines for securities lending participants, known as its Principles for Sustainable Securities Lending.
The process of creating the guidance, ICSF says, should involve informing the key stakeholders regularly about the market participants’ behaviour, and (crucially) be subject to continuous review.
To further this aim, ICSF aims to convene an initial roundtable “in the near future” that will contribute to its ambition of creating a forum to discuss sustainability in securities lending, and is calling on ISLA members to voice their interests in contributing.
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