IOSCO Unveils Five-Point Plan to Strengthen Sustainable Bond Market
IOSCO releases a five-point plan in its Sustainable Bonds Report to support regulatory consistency, transparency, and growth in the global sustainable bond market, with total 2024 issuance reaching USD 1.1 trillion.
The International Organization of Securities Commissions (IOSCO) has recently released its Sustainable Bonds Report, which outlines a five point action plan to enhance the growth, transparency and integrity of the global sustainable bond market, which has quickly become a vital component to sustainable finance.
Sustainable bonds: green, social, sustainability and sustainability-linked; continue to take flight among issuers and investors alike. IOSCO reports that total global issuance of sustainable bonds in 2024 was USD 1.1 trillion (up 5% year-on-year) and cumulative issuance of over USD 6 trillion and increasing.
IOSCO lays out five key regulatory suggestions to guarantee further expansion while preserving investor trust and market stability. To encourage uniformity and increase market participation, they include bringing national regulatory frameworks into line with international norms. In order to improve clarity and lessen market uncertainty, it also emphasizes the necessity of precise definitions and categorization schemes for the various kinds of sustainable bonds.
Enhancing issuer disclosure obligations is the subject of another suggestion. Transparency and accountability are increased through frequent public reporting on the status of sustainability performance objectives (SPTs). In order to reduce potential conflicts of interest and offer unbiased assessments of bond credibility, IOSCO also promotes the use of independent, third-party assessments.
The fifth objective promotes broader training and teaching programs aimed at investors, regulators, and market players. In both developed and emerging economies, these initiatives seek to increase awareness, enhance capacity, and support well-informed decision-making.
Research, member surveys, and a stakeholder discussion with the Organization for Economic Co-operation and Development (OECD) during IOSCO's 2024 Annual Meeting are all included in the study. It represents international perspectives on contemporary procedures and legal frameworks pertaining to sustainable bonding in diverse jurisdictions.
With the growing demand for socially and climate-conscious investments, IOSCO's proposal is viewed as a calculated step to uphold the integrity of the bond market and increase the legitimacy of sustainable financing products.
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