To ensure progress matches the pace and scale demanded by global sustainability challenges, the international community must do more to support the finance industry to optimise the impact we can have. GSIA makes the following policy recommendations to the international community that, if implemented, would drive capital flows towards projects and investments that will accelerate the world’s transition to a sustainable future.

Net Zero Investment Opportunities

The GFANZ commitments made in 2021 at COP26 in Glasgow showcase the willingness of the world’s asset owners and managers to move vast private capital towards net zero over the coming decades. However, investors now require a large-scale pipeline of net zero investment opportunities to allow investment to take place.

National governments can unlock significant flows of capital from global investors, particularly those with strong commitments to GFANZ, if they put in place the right policy signals, supportive policy frameworks, and create investment opportunities. This will enable an acceleration of capital flows consistent with net zero commitments. Governments need to provide supportive capital market environments which align subsidies, market incentives, and government structures to ensure transformative public and private investment flows can be unlocked.

International Regulatory Alignment

Many asset managers and financiers have clients and investments across the world and report increasing challenges in aligning with the large number of regulatory approaches being developed. These regulatory approaches are often designed to achieve similar outcomes.

Governments, regulators, and standard-setters should work together to support closer global alignment on sustainable finance regulations to address fragmentation and support greater convergence, while avoiding a ‘lowest common denominator’ approach and being mindful of different regional environmental and economic circumstances.

We are broadly supportive of global efforts underway, including the ISSB, ESRS, IOSCO, NGFS and GFANZ, but more needs to be done. We recommend the international community – perhaps under the G20 Sustainable Finance Working Group – rapidly convenes a Sustainable Finance Regulatory Convergence Taskforce, to review the landscape and make recommendations for enhancements and greater alignment. As a global organisation, GSIA is well-placed to support and contribute to such a taskforce.

Enhance Data Availability

Efficient markets rely on transparent, accessible and comparable data – nowhere is this more true than in the rapidly-evolving world of sustainable finance. To ensure investors receive the data necessary to effectively incorporate sustainability factors into investment decisions, we are calling for the widespread and rapid adoption of a global baseline for strengthened corporate sustainability disclosures, ESG ratings and benchmarks. Such a baseline should aim to be as consistent as possible, while taking into account variations in circumstances across the world.

Nature And Biodiversity

The international finance community can play a key role in simultaneously helping to address climate change alongside biodiversity and nature loss, particularly through consideration of nature-related dependencies, impacts, risks and opportunities. We support moves by the international community to rapidly address these interconnected challenges.

We encourage governments to support and advance the disclosure frameworks that allow for better assessment of such risks and impacts, including the global adoption of the disclosure recommendations prepared by the Taskforce on Nature-related Financial Disclosures (TNFD) and the incorporation of TNFD reporting for corporations into the ISSB framework.