ISS ESG: The Depth & Breadth of Sustainable Finance Regulatory Initiatives: Global Developments in 2022

ISS ESG, the responsible investment arm of Institutional Shareholder Services Inc. (ISS), today released its latest global regulatory initiatives report, The Depth & Breadth of Sustainable Finance Regulatory Initiatives: Global Developments in 2022. The report leverages the proprietary ISS ESG Regulation Depth and Breadth Index to provide a global comparative analysis of the number and breadth of initiatives proposed or implemented to date, as well as a qualitative summary of initiatives, by region and country.

The new report continues to track the six key topic areas in sustainable finance regulation identified by the inaugural ISS ESG report in this series, namely: taxonomies; product standards, disclosures and labelling; management and disclosure of climate risks; management and disclosure of ESG risks; ESG in stewardship; and green bond guidelines.

The report finds that the scope and pace of global sustainable finance regulation has accelerated in 2022 across these key topic areas, and that the European Union continues to be the leading region in the depth and breadth of its regulatory initiatives.  Asia has accelerated the pace of growth in new initiatives, and North America and Australia have significantly increased their regulatory efforts for ESG-related capital markets. The UK has also proposed an ambitious agenda, which it is expected to advance going forward.

Regulatory efforts continue to prioritize management of climate-related financial risk as well as preventing greenwashing, although the agenda is beginning to expand to nature-related risks and social issues as well.

Dr. Maximilian Horster, Head of ISS ESG said: “This latest report in our series provides a helpful comparative snapshot of rapidly evolving regulatory initiatives and related objectives, against a challenging backdrop of geopolitical tensions, economic volatility, and the politicization of sustainable finance.” He added: “Given these conditions, policymakers may aim to pursue sustainable finance regulation that reconciles policy objectives and fosters economic and energy resilience in line with climate transition goals.”

Download a copy of the report here.