Industry calls for further guidance on all sustainability-related repo
02 September 2024 Global
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Industry participants have called for further dedicated guidance to cover all types of sustainability-related repo.
The finding comes from the International Capital Market Association’s (ICMA’s) release of market feedback from its ‘2024 Repo and Sustainability Market Survey’, which was launched in February.
The survey aimed to deepen the understanding of existing market practices and identify issues for further reflection and future guidance.
It also builds on the observations and categorisations from ICMA’s 2022 paper on sustainability in the repo market.
Within its findings, ICMA also found confirmation that the majority of respondents active in this market primarily focus on repo transactions involving sustainable collateral. In addition, sustainability-related repo remains their top priority.
Market participants agreed that use of proceeds and sustainability-linked repo should be transacted under firms’ overarching sustainability frameworks or strategies, says ICMA.
In the summary, participants also highlight a consensus on which any green claims should remain with the repo seller, who retains the economic exposure to the assets, to avoid double-counting from an accounting perspective.
Guided by members of the Repo & Sustainability Taskforce, ICMA will continue to closely monitor the market evolution and is looking to work on expanded guidance as a next step.
The finding comes from the International Capital Market Association’s (ICMA’s) release of market feedback from its ‘2024 Repo and Sustainability Market Survey’, which was launched in February.
The survey aimed to deepen the understanding of existing market practices and identify issues for further reflection and future guidance.
It also builds on the observations and categorisations from ICMA’s 2022 paper on sustainability in the repo market.
Within its findings, ICMA also found confirmation that the majority of respondents active in this market primarily focus on repo transactions involving sustainable collateral. In addition, sustainability-related repo remains their top priority.
Market participants agreed that use of proceeds and sustainability-linked repo should be transacted under firms’ overarching sustainability frameworks or strategies, says ICMA.
In the summary, participants also highlight a consensus on which any green claims should remain with the repo seller, who retains the economic exposure to the assets, to avoid double-counting from an accounting perspective.
Guided by members of the Repo & Sustainability Taskforce, ICMA will continue to closely monitor the market evolution and is looking to work on expanded guidance as a next step.
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