Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

New standard to ‘demystify’ sustainability principles in finance

© Shutterstock / pcruciattiPost Thumbnail

The British Standards Institution (BSI) has launched a Sustainable Finance Standard intended to ‘demystify’ sustainability principles for financial sector organisations.

  • The new Sustainable Finance Standard is intended to address the lack of clarity surrounding the sustainable finance sector, which is subject to various frameworks and regulations in many jurisdictions.
  • The guidance contains advice on several key areas and is designed for all organisations taking part in the sector.
  • This will ultimately affect companies and entrepreneurs, as they may encounter stricter criteria to raise capital in the future.

The new, globally applicable Sustainable Finance Standard offers guidance for finance organisations to drive sustainable outcomes and integrate key principles of sustainability into their operations, activities, products and services.

It was published by BSI in its role as the National Standards Body, and has been developed to address the lack of clarity surrounding the global sustainable finance sector. With numerous frameworks and regulations in different jurisdictions, these principles are designed to address this fragmentation and facilitate greater collaboration.

What areas are covered by the Standard?

The guidance contains advice on several key areas in the world of sustainable finance. These include governance and culture, including that responsibility for sustainability matters should be integrated throughout corporate culture, as well as strategy alignment and objectives, including the adoption of a governing-body-approved sustainability policy or similar statement.

The advice also focuses on risk and opportunity management and impact assessment, stakeholder engagement, monitoring, measuring and metrics, reporting, transparency and assurance and continual improvement and enhancing ambition. It does so by addressing what is material from the perspective of the organisation and its stakeholders.

Who can use it?

Beyond financial institutions and intermediaries, the BSI said that its document can be used by other parties such as providers or recipients of sustainable finance, governmental organisations, public and private sector, business entities, industry associations, financial market regulators, and supervisory and control bodies.

The idea is that using the standard will allow entities to demonstrate alignment with the sustainability principles, guidance and practices, and internal governance provided in the document, through their actions, including stakeholder engagement, reporting and disclosures.

It is hoped it will help financial organisations avoid greenwash by setting a credible, coherent path to becoming more sustainable. It also provides a framework for those that wish to be sustainable and better aligned with global initiatives such as the United Nation’s Sustainable Development Goals and the Paris Agreement.

The standard intends to facilitate shared understanding and collaboration in the global finance sector around sustainability. The framework recognises that transformation is needed to equip the industry to address issues across all elements of ESG including inequality, climate change, environmental degradation, poverty, prosperity, peace, and justice.

Financing the transition

The financial sector plays a vital role in addressing global environmental and social challenges: for example, it provides the much-needed capital to fund new technologies and sustainability initiatives. In understanding and developing an alignment of interest in tackling these issues, global organisations can contribute toward positive environmental and social outcomes and drive progress towards a sustainable world.

This will ultimately affect companies and entrepreneurs looking to raise capital, as tighter standards for financial entities will lead to stricter criteria for lending and investing.

“The global challenges we face mean it is vital for financial organizations to play their part in building a more sustainable economy and society. The new narrative of change has to be collaboration and not competition. Ensuring all in the financial sector are talking the same language and tackling the heart of the issue is essential,” said Nigel Topping, the former UN High-Level Climate Action Champion.

“Standards play an ever-increasing role in issues with a global impact and relevance; I saw first-hand at COP27 with the work that BSI has done around the Net Zero Guidelines, which were a significant step forward. This new standard will drive change and help embed sustainability in the global financial sector.”

More from SG Voice

Latest Posts