The International Standards Organisation (ISO) has launched formal “guidance on the application of sustainability principles in the financial sector.”
The guidance was developed by the British Standards Institute (BSI) in its role as the National Standards Body (NSB).
According to the BSI, given the numerous frameworks and regulations in different jurisdictions, these principles are designed to address this fragmentation and facilitate greater collaboration in the sector by offering a path through the confusion for financial organisations.
The aim is to help financial organisations avoid greenwashing by setting a credible, coherent path to becoming more sustainable.
The guidance provides a framework for organisations that wish to be sustainable and better aligned with global initiatives like the United Nation’s Sustainable Development Goals (UN SDGs) and the Paris Agreement.
It identifies seven areas where financial institutions should integrate sustainability.These include governance and culture, strategy, assessment of risks, opportunities and impacts as well as stakeholder engagement;.
Also on the list are metrics and measurement, reporting and assurance. and improving ambitions over time.
BSI said that banks, insurers, asset managers and service providers can use relevant parts of the new standard to integrate sustainable finance principles into their operations, products and services. It can also be used by regulators.
The guidance is the result of a five-year partnership between the BSI, the City of London’s then Green Finance Initiative and the UK’s now-defunct government department for Business Energy and Industrial Strategy.
The project, kicked off in 2018, aimed to “define globally applicable standards for the finance sector”.
BSI has committed to embed climate science into every new or revised standard it creates.
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