Securities Regulators and Sustainable Development
Many securities regulators around the world have demonstrated increasing interest in the relationship between sustainability issues and their core mandates. While their specific roles, responsibilities and authorities differ from jurisdiction to jurisdiction, securities regulators are recognised by IOSCO to generally have three overarching and interrelated objectives:
- To protect investors;
- To ensure that markets are fair, efficient and transparent; and
- To reduce systemic risk.
The SDGs are an articulation of the world’s most pressing sustainability issues, the scope of which includes ESG issues plus economic development. The SDGs can therefore be seen as an “ESG+” policy framework that provides some guidance as to the potential direction of travel for public policy and markets in these areas.
While most securities regulators do not have explicit organisational mandates to promote sustainable development, sustainability issues in and of themselves, as well as policy responses to these issues, are of direct relevance to their existing mandates. This is because sustainability issues can create financially material risks and opportunities for investors and may affect the resilience of the financial system as a whole.
The Action Plan
What people are saying
“I applaud the SSE and its Advisory Group for making a valuable contribution to the ongoing discussion among securities market regulators, exchanges, investors and issuers to promote sustainable finance. This new SSE research provides a constructive framework and practical set of illustrative examples to help securities regulators further explore how they can encourage investment in sustainable development.”
Financial Regulatory Authority
“Through the Sustainable Stock Exchanges (SSE) initiative, the world’s exchanges have taken a bold but pragmatic lead in working toward this future. In this guidance, the SSE outlines key considerations for securities regulators and identifies areas in which they can most usefully focus their efforts to uphold their responsibilities as regulators while helping to align capital markets with the needs of the future via the SDGs. In doing so, it also recognises that regulators have unique jurisdictional mandates within which they must operate, varying capacities to affect change, and different starting points from which to build.”
Mary L. Schapiro,
29th Chair of the U.S. Securities and Exchange Commission
Independent Non-executive Director, London Stock Exchange Group Board Vice Chair, SASB Foundation Board of Directors
The SSE works with securities regulators to implement guidance on sustainable development through donor-sponsored technical assistance. For more information, please contact the SSE team directly via email: info(at)SSEinitiative.org