The British Standards Institute has introduced a Sustainable Finance Standard to clarify the principles of sustainable finance in the market. This standard aims to make it easier for stakeholders to understand and implement this concept.
The International Standards Organisation (ISO) has recently announced the launch of a new standard designed to facilitate sustainable finance across the world. The ISO 20400 Sustainable Procurement Standard draws on existing international and national norms and features best practices, guidelines and principles aimed at creating a shared understanding of sustainability requirements across economic, social and environmental areas. The ISO believes that this new standard can help create a more sustainable future by supporting government initiatives, corporate strategies, and procurement decisions.
Following the call from ESG investors for guidance in the financial sector, BSI Global Head of Sustainability and Circular Economy, Martin Townsend, launched their standard to simplify sustainability principles for organisations in this field. The term ‘demystifying’ in this process was utilized to ensure an understandable and straightforward guide was provided.
BSI has recently launched a new standard for sustainable finance, which will promote the adoption and implementation of sustainability strategies. This standard focuses on the “how” of sustainability, aligning with other tools and regulations in the finance industry, such as principles, labels, and standards. It is designed to fit into the growing number of sustainability efforts in the industry.
This initiative is aligned with both the Paris Agreement and United Nations’ Sustainable Development Goals (UN SDGs) to meet global targets for tackling climate change.
Tim Mohin, an ex-CEO of the Global Reporting Initiative and a Partner at Boston Consulting Group, has applauded the introduction of the ISO standard in finance. He observes that it is beneficial to have an international standard on top of existing environmental, social and governance (ESG) policies. He notes that this may help immensely with organizing disclosures for sustainability as well as enabling useful information regarding transparency.
“It’s no longer acceptable for firms to get away with making unsustainable or unsupported sustainability claims,” said the analyst. In response, they have launched new services and initiatives in order to better equip organizations to properly finance their sustainability goals.