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Regulation

Regulators should urge public companies to disclose ESG info – IOSCO

The International Organization of Securities Commissions released a statement urging securities regulators to actively engage public companies to disclose material ESG information to investors.

The organization, known as IOSCO, published the statement Friday regarding environmental, social and governance issues because one of its principles is that issuers should provide "full, accurate, and timely disclosure of financial results, risk and other information (that) is material to investors' decisions" and that while ESG issues might be considered non-financial issues, they still have both short-term and long-term impacts on risk management and investment returns.

In the statement, IOSCO said it encourages issuers to weigh how ESG matters affect their businesses and "to assess risks and opportunities in light of their business strategy and risk assessment methodology. When ESG matters are considered to be material, issuers should disclose the impact or potential impact on their financial performance and value creation."

IOSCO also said it encourages those public companies that provide information on material ESG risks to provide insight into the governance and oversight of those risks. Those companies could, for example, disclose "the methodologies they follow in their risk assessments, and the steps taken, and/or action plans developed, to address the risks that they have identified. The information provided by issuers should be balanced and should consider and reflect both risks and opportunities presented by material ESG matters."

The full statement is available on IOSCO's website.