Industry standards providing stepping stone for ESG regulation

Author: Jimmie Franklin | Published: 29 Apr 2020

Industry standards set by membership bodies, such as the International Capital Market Association (ICMA), as well as not for profit initiatives, such as the UN Principles for Responsible Investments (UNPRI), have made the financial industry better prepared for upcoming ESG regulation.

While these remain non-legally binding instruments, they have raised awareness at board level in companies.

"Soft law standards have been very influential and there is often widespread business convergence around them because they help companies to think in more practical terms about how they might manage risks," said Linklaters partner Rachel Barrett, adding that such standards offer a governance framework that is recognisable to companies, making it easier for them to implement.

ICMA managing director and head of sustainable finance, Nicholas Pfaff, agreed. "Industry standards such as the green bond principles (GBP) have successfully paved the way for the growth of sustainable finance and are arguably informing legislators and...