An international code on investor duties and sustainable development is just one of a range of proposals that has been put forward by a far-reaching, systematic review of the global financial system that is being presented to global finance leaders at the IMF/World Bank meetings.
The UN Environment Programme’s high-level Inquiry: Design of a Sustainable Financial System was begun just under two years ago and consulted widely across the financial landscape.
CalPERS’ CEO Anne Stausboll was just one of the leading figures on an Advisory Council that fed into the 112-page report. She said the Inquiry presents a “framework for policymakers” to incorporate sustainability into the rules that govern the financial system.
An investor code is one of the most eye-catching ideas in the report, and the Inquiry suggests it “would help to crystallise good practice and provide a platform for wider adoption of higher standards”.
It could be developed, the Inquiry says, through a working group of leading institutional investors and pension regulators, working with the International Organisation of Pension Supervisors (IOPS) and the World Bank.
Another key recommendations are for the establishment of an international research consortium to take forward under-explored topics and themes.The report very much stresses the need and value of coalitions in advancing a sustainable financial system.
The project was supported by the Norwegian and UK governments and led by Nick Robins, the former Head of HSBC’s Climate Change Centre of Excellence and Simon Zadek, Senior Fellow at the Global Green Growth Institute.
The report speaks of a “historic window of opportunity” to develop a sustainable financial system. It found a quiet revolution taking place with over 100 examples of policy measures across 40 countries seeking to integrate sustainable development into the fabric of the financial system.
Other ideas proposed include the incorporation of systemic environmental standards into banking standards such as the Basel Accords. This could be via national banking authorities and commercial banks working with the BIS.
Other suggestions include the establishment of a green capital markets coalition of investors and governments, guidance on sustainable insurance and convergence in sustainability disclosure standards.
UNEP Executive Director Achim Steiner said: “We now need to raise the level of ambition and cooperation to ensure that the heartland of the global economy, the financial system, can evolve to serve its core purpose of growing and sustaining the real economy.” UNEP home page