IOSCO has created a new system to translate the multitude of various requirements from individual regulatory bodies into “an extra clear and … extra standardised” kind. It can additionally probe for greenwashing in asset administration and analyse the supervisory practices of index suppliers.

This program was initially announced in the IOSCO Sustainable Finance Network report ‘Sustainable Finance and the Role of Security Regulators and IOSCO’. The report highlighted three consistent themes; “sustainability related disclosure”, “a lock of common definitions of sustainable activities” and “greenwashing and other challenges to investor protection”. 

The IOSCO board established in April 2020 a task force on sustainable finance as a result of this report. The task force functions on three aims. The first is to improve sustainability related disclosures made by issuers and asset managers. The second is to work in collaboration with other international organisations and regulators to avoid duplicative efforts. The final aim is to prepare case studies and analyses of transparency, investor protection and other relevant issues within sustainable finance to illustrate the practical implications of the work. 

The IOSCO efforts will not be legally binding, however it may influence future guidelines for establishing ESG standards and regulations.