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February 17, 2022

WASHINGTON, D.C. – A new report published today by the Institute of International Finance (IIF) lays out a vision for how the public and private sectors can increase alignment and maintain integrity in sustainable finance markets around the world.

“Global challenges require global solutions, predicated on common approaches and international coordination,” said Tim Adams, President and CEO of IIF. “Financial industry leaders have made it clear they support the net-zero transition, and many important market-led initiatives are underway. But our industry alone can’t solve this challenge – we need consistent, coherent and coordinated policy action from the public sector.”

This paper, “Integrity through Alignment: A 2022 Roadmap for Global Standards and Market-led Approaches in Sustainable Finance,” sets out roadmap for public-private collaboration on shared priorities – namely, ensuring that sustainable finance markets have integrity, can operate efficiently and are robust when it comes to facing potential future shocks and trends.

The paper identifies six key areas of focus in 2022 for further development and alignment of market-led and official-sector initiatives:

  1. Disclosure standards
  2. ESG data and ratings
  3. Classification systems/taxonomies
  4. Scenario-based climate risk measurement exercises
  5. Regulatory capital
  6. Net Zero alignment and transition plans

The IIF notes that clear, pragmatic and risk-based expectations from regulators and prudential authorities will be needed for the financial industry to respond to the climate crisis with the necessary urgency and scale.  Towards this end, the IIF recently responded to consultations from the Basel Committee on Banking Supervision (BCBS) and U.S. Office of the Comptroller of the Currency (OCC), welcoming efforts to establish a principles-based approach to climate-related financial risk management and to strengthen coordination and harmonization of supervisory efforts globally.

Public-private sector collaboration will be critical to developing a more systematic understanding of climate-related risks across the financial sector. The IIF continues to promote open and collaborative dialogue with the regulatory community and other stakeholders in support of global policy approaches that enable the private financial sector to respond effectively to climate-related financial risks.

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About the Institute of International Finance (IIF)

The Institute of International Finance (IIF) is the global association of the financial industry, with more than 400 members from more than 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks. To learn more about IIF, please visit www.iif.com, follow us on Twitter, LinkedIn or YouTube, or check out IIF’s podcasts.