New BSI guidance aims to ‘demystify’ sustainability principles for the financial sector.
Explaining the Sustainable Finance Standard (BS ISO 32210:2022), former UN High-Level Climate Action Champion Nigel Topping said: “The new narrative of change has to be collaboration and not competition. Ensuring all in the financial sector are talking the same language and tackling the heart of the issue is essential.”
The standard offers guidance for finance organisations, including lenders and investors, asset managers and service providers, to develop sustainable outcomes and integrate key principles of sustainability into operations, activities, products and services.
The globally applicable standard, published by BSI in its role as the National Standards Body (NSB), seeks to address the lack of clarity surrounding the sector. With numerous frameworks and regulations in different jurisdictions, the principles seek to address this fragmentation and facilitate greater collaboration in the sector by offering a path through the confusion for financial organizations.
It also aims to help organisations avoid greenwashing by setting a credible, coherent path to more sustainability, and offer better alignment with initiatives like the United Nations’ Sustainable Development Goals (UN SDGs) and the Paris Agreement.
Scott Steedman, Director General, Standards, BSI said: “Strengthening understanding of what sustainable finance is, by enhancing global consistency and offering more certainty, has the potential to offer a huge benefit to society. Harmonizing, aligning and demystifying the complex international system of regulation, frameworks and standards can help financial sector organisations accelerate change and support the realisation of sustainability ambitions.
“BSI is committed to supporting financial organizations on their journeys to becoming more sustainable, by clarifying what is expected of them and how to align their strategy and operations with different regulatory requirements and stakeholder and market expectations. This new standard on sustainable finance can build confidence in the financial sector and offer long-term benefit for everyone.”
Nigel Topping added: ‘The global challenges we face mean it is vital for financial organizations to play their part in building a more sustainable economy and society. The new narrative of change has to be collaboration and not competition. Ensuring all in the financial sector are talking the same language and tackling the heart of the issue is essential.
“Standards play an ever-increasing role in issues with a global impact and relevance; I saw first-hand at COP27 with the work that BSI has done around the Net Zero Guidelines, which were a significant step forward. This new standard will drive change and help embed sustainability in the global financial sector.”
BS ISO 32210 contains advice on key areas such as:
Governance and culture, including that responsibility for sustainability matters should be integrated throughout corporate culture.
Strategy alignment and objectives – including the adoption of a governing-body-approved sustainability policy or similar statement.
Risk and opportunity management and impact assessment.
Monitoring, measuring and metrics.
Reporting, transparency and assurance.
Continual improvement and enhancing ambition.
Beyond financial institutions and intermediaries, the information can be used by other parties such as providers or recipients of sustainable finance, governmental organisations, public and private sector, business entities, industry associations, financial market regulators, and supervisory and control bodies.