MEDIA RELEASE

International Organization of Securities Commissions
Organisation internationale des commissions de valeurs
Organização Internacional das Comissões de Valores
Organización Internacional de Comisiones de Valores‫اﻟﻣﻧظﻣﺔ اﻟدوﻟﯾﺔ ﻟﮭﯾﺋﺎت اﻷوراق اﻟﻣﺎﻟﯽ ة‬

IOSCO/MR/29/2021
Madrid, 2 November 2021
Setting regulatory and supervisory expectations for asset managers is fundamental
to address greenwashing concerns, says IOSCOThe Board of the International Organization of Securities Commissions (IOSCO) has publishedtoday a set of recommendations about sustainability-related practices, policies, procedures anddisclosures in the asset management industry.
Ashley Alder, Chairman of IOSCO and CEO of the Hong Kong SFC said that “Assetmanagers, who are a critical part of the sustainable finance ecosystem, play a major role inhelping investors achieve their investment objectives. Regulatory guidance on how asset
managers consider material sustainability-related risks and opportunities, integrate them into
the decision-making process, and make disclosures, will allow investors to understand theimpact of their investments.”
There have been challenges associated with the growth of ESG investing and sustainabilityrelated products in recent years, including a greater need for consistent, comparable, anddecision-useful information and the risk of greenwashing. The report, which reflects thefeedback received in response to the consultation report that was published in June 2021,
focuses on these investor protection issues and covers five areas: asset manager practices,policies, procedures and disclosure; product disclosure; supervision and enforcement;terminology; and financial and investor education.
The report also recognizes a clear need to address the challenges associated with the lack ofreliability and comparability of data at the corporate issuer level and the ESG data and ratings
provided by third-party providers to enable the investment industry to properly evaluatesustainability-related risks and opportunities. The Report on Sustainability-related Issuer
Disclosures, which was published in June this year, addresses data gaps at the corporate issuer

1MEDIA RELEASE

International Organization of Securities Commissions
Organisation internationale des commissions de valeurs
Organização Internacional das Comissões de Valores
Organización Internacional de Comisiones de Valores‫اﻟﻣﻧظﻣﺔ اﻟدوﻟﯾﺔ ﻟﮭﯾﺋﺎت اﻷوراق اﻟﻣﺎﻟﯽ ة‬level. A separate IOSCO report will be published later in November and will coverrecommendations for ESG data and ratings providers.

Erik Thedéen, head of the Swedish Financial Supervisory Authority, is the Chair of the
Sustainable Finance Taskforce set up by the IOSCO Board, which issued this report. He
commented: “Our common objectives as securities regulators are to protect investors, as wellas to support market integrity, by ensuring transparency and disclosure of information that ismaterial to investment decisions. Improving underlying data is critical but not sufficient if assetmanagers do not properly integrate sustainability risks into their risk management procedures– or if they misrepresent the ESG features or performance of their funds to their investors.
Setting regulatory and supervisory expectations is therefore fundamental to addressing issues
relating to risk mismanagement and greenwashing. This report sets out IOSCO´s view of whatthese expectations should be to support asset managers in addressing current challenges.”

Greenwashing refers to the practice by asset managers of misrepresenting their sustainabilityrelated practices or the sustainability-related features of their investment products. Such
practices may vary in scope and severity, from the inappropriate use of specific sustainabilityrelated terms used in an offering document, to misrepresentations about an entity’ssustainability-related commitments, to deceptive marketing practices that deliberately
misrepresent a product’s sustainable impact.

The recommendations in the report cover a range of areas, all of which can help prevent
greenwashing. For example, requirements relating to the disclosure of material risks forsustainability-related products can help prevent greenwashing by enabling investors to better
understand the potential risks associated with the product and the impact of those risks on a
product’s performance, including sustainability-related performance. Similarly, requirements
relating to naming for sustainability-related products can help prevent greenwashing byensuring that products that identify themselves as sustainability-related through their names areaccurately reflecting their focus on sustainability.
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MEDIA RELEASE

International Organization of Securities Commissions
Organisation internationale des commissions de valeurs
Organização Internacional das Comissões de Valores
Organización Internacional de Comisiones de Valores‫اﻟﻣﻧظﻣﺔ اﻟدوﻟﯾﺔ ﻟﮭﯾﺋﺎت اﻷوراق اﻟﻣﺎﻟﯽ ة‬

The recommendations also address the risk of greenwashing through other areas, including
supporting sustainability-related financial and investor education initiatives and ensuring that
there are adequate supervisory and enforcement tools to monitor and assess compliance withrequirements in this area and address breaches of such requirements.

Notes to the Editor:
1. IOSCO is the leading international policy forum for securities regulators and is recognized
as the global standard setter for securities regulation. The organization's membershipregulates more than 95% of the world's securities markets in some 130 jurisdictions, and it
continues to expand.
2. The IOSCO Board is the governing and standard-setting body of IOSCO and is made up of34 securities regulators. Mr. Ashley Alder, the Chief Executive Officer of the Securities
and Futures Commission of Hong Kong, is the Chair of the IOSCO Board. The membersof the IOSCO Board are the securities regulatory authorities of Argentina, Australia,Bahamas, Belgium, Brazil, China, Egypt, France, Germany, Hong Kong, India, Ireland,Italy, Japan, Kenya, Korea, Malaysia, Mexico, Morocco, Nigeria, Ontario, Pakistan,Portugal, Quebec, Russia, Saudi Arabia, Singapore, Spain, Sweden, Switzerland, Turkey,
the United Kingdom and the United States of America (both the U.S. Commodity Futures
Trading Commission and U.S. Securities and Exchange Commission). The Chair of theEuropean Securities and Markets Authority and the Chair of IOSCO´s Affiliate Members
Consultative Committee are also observers.
3. The Growth and Emerging Markets (GEM) Committee is the largest committee within
IOSCO, representing more than 75% per cent of the IOSCO membership, including 10 of
the G20 members. Dr. Mohammed Omran, Executive Chairman of the FinancialRegulatory Authority, Egypt is Chair of the GEM Committee. The committee brings
members from growth and emerging markets together and communicates members’ views
and facilitates their contribution across IOSCO and at other global regulatory discussions.
The GEM Committee’s strategic priorities are focussed, amongst others, on risks andvulnerabilities assessments, policy and development work affecting emerging markets, andregulatory capacity building.
4. IOSCO aims through its permanent structures:•to cooperate in developing, implementing and promoting internationally recognized andconsistent standards of regulation, oversight and enforcement to protect investors,
maintain fair, efficient and transparent markets, and seek to address systemic risks;3

MEDIA RELEASE

International Organization of Securities Commissions
Organisation internationale des commissions de valeurs
Organização Internacional das Comissões de Valores
Organización Internacional de Comisiones de Valores‫اﻟﻣﻧظﻣﺔ اﻟدوﻟﯾﺔ ﻟﮭﯾﺋﺎت اﻷوراق اﻟﻣﺎﻟﯽ ة‬•

to enhance investor protection and promote investor confidence in the integrity ofsecurities markets, through strengthened information exchange and cooperation inenforcement against misconduct and in supervision of markets and marketintermediaries; and•to exchange information at both global and regional levels on their respective
experiences to assist the development of markets, strengthen market infrastructure andimplement appropriate regulation.

MEDIA ENQUIRIESCarlta Vitzthum
Email:
Website:Follow IOSCO on34 697 449 639
carlta@iosco.org
www.iosco.org
Twitter here4