Aviva and Investec chiefs call for global sustainability standards body

Mark Wilson and Hendrik du Toit are co-chairs of high-level panel

A United Nations-backed panel co-chaired by the heads of Aviva and Investec has called for the creation of a global sustainability standards body along the lines of the International Accounting Standards Board (IASB).

The Finance Working Group of the Business and Sustainable Development Commission made a series of recommendations on how to unlock $2-3trn of investment into the UN Sustainable Development Goals (SDGs) in a new report presented at the World Economic Forum in Davos

Among them is a call for the setting up of an International Sustainability Standards Board (ISSB).

“There is a clear need for a central organisation and standard-setting board to oversee progress toward global sustainability. This institution would play a similar role to the International Accounting Standards Board (IASB), which is in charge of the International Financial Reporting Standards (IFRS),” the report says. It’s proposed that the mooted ISSB should be a “multi-stakeholder initiative” but should be commissioned by the Financial Stability Board (FSB) of the G20.

The working group is co-chaired by Aviva CEO Mark Wilson and Hendrik du Toit, CEO of Investec Asset Management, in a personal capacity and they co-wrote the report, called Ideas for Action for a long-term and Sustainable Financial System, with Aniket Shah, Programme Leader of Sustainable Finance at the UN Sustainable Development Solutions Network (SDSN).

The commission itself is an initiative focused on building the economic case for businesses to engage with the SDGs set up by Unilever CEO Paul Polman and former UN Deputy Secretary General Mark Malloch Brown at the World Economic Forum in Davos last year. The Commission, a coalition of over 35 CEOs and civil society leaders, argue that sustainable business models could unlock economic opportunities worth $12trn by 2030.Its supporters include the UN Foundation, the Australian, British and Swedish governments, the Bill & Melinda Gates Foundation and Unilever.

Recognising that financing the SDGs is a complex task, the report highlights that an unprecedented coordination between public sector organisations and private institutions is required, including significant reform within global financial regulation and financial institutions.

It also recommends the creation of corporate sustainability benchmarks aligned to the SDGs, noting the lack of publicly available ESG data is a hindrance for institutional investors and civil society.

Focus area three is entitled ‘Getting Sustainable Infrastructure Right’, and to achieve this the report calls for a carbon price and the removal of fossil fuel subsidies, and national-level infrastructure plans coherent with the climate change limit of two degrees Celsius.

The fourth area is on creating pools of long-term finance for sustainable development. The report notes that the design and structure of institutional investors is an important policy question for governments interested in long-term financing. For example, in light of the increasing shift from defined benefit (DB) retirement savings to defined contribution (DC) saving, it says investment in long-term illiquid assets such as infrastructure pose practical problems as liquidity is required to allow individuals to drawdown and switch providers easily in DC schemes.

Du Toit said: “As stewards of long-term capital on behalf of this generation, we cannot ignore the welfare of future generations. The investment industry and its clients can support the achievement of the SDGs by creating, standardized sustainability metrics integral to the investment process.” Home page