Standards Development

Scope

This document provides requirements and guidelines for development, implementation and presentation of sustainable finance products and services.

This document enables sustainable finance practitioners to define the properties of self-developed sustainable finance products and services, integrate sustainability considerations into existing finance products and services, and evaluate external sustainable finance products and services.

This document supports the implementation of sustainable finance products and services, the fair promotion and transparent reporting of sustainability performance.

Purpose

As addressed more and more by regulators and consumer organizations, there is a primary need for a comprehensive and unifying standard, as market actors may be confronted with different initiatives providing inconsistent or even contradictory information and advice on development, implementation and presentation of sustainable finance products and services. In 2019, TC322’s Stocktaking Study Group (STSG) analysed 122 international initiatives addressing diverse aspects of sustainable finance.

The study identified many examples of different approaches, from standards to providing best practice and high-level explanation for the development of products and services aiming at supporting sustainable development by financial markets.

The examples analysed give guidance mainly for documenting the qualities or properties of such financial products within a green or sustainable development finance context, whether to support labelling purposes or to reduce deficits from being unspecific or ubiquitous, without proposing, for example, reference or documentation. This bears the risk of what is called ‘standard shopping’ for the lowest quality requirements and allowing greenwashing when advertising, promoting and reporting sustainable finance products and services.

Another aspect to consider is that the holistic or specific approach of the proposed guidance depends often on the history, purpose and stakeholders of the organizations behind an initiative. Early initiatives were mainly looking at “E” and, over time, began to integrate “S” and “G”, often as an add-on factor to the more mature environmental aspects. On the other hand, looking for ESG gaps or overlays is not only about a limited focus as well as mission of some initiatives, but may also concern potential conflicts: competing views on functionality, importance and significance, today branded as materiality.

The diversity of initiatives and thus of actors provides ISO/TC 322 with the opportunity to develop a standard by integrating the most holistic approaches and market participants, the actors. Standards are developed when there is consensus, and an open mind for synergies through normalization efforts.

The opportunity is to develop a common view of sustainable finance products and services and identify the essential components of quality and potential for contributing to sustainable development, and to prevent “greenwash” or “sustainable wash”. In addition, requirements on marketing and reporting of sustainability performance of finance products and services would support clients and partners in improving their confidence in the sustainable outcomes.

The document would be applicable for any organization considering to provide sustainable finance products and services with a full integration of ESG aspects, whether to align existing or to design new ones. It may also be used by stakeholders to evaluate the general design or the specifications of sustainable finance products and services. The document is useful for those organizations wanting to present sustainable finance products and services through fair promotion and transparent reporting.

The document aims at supporting in particular future users of the ISO 32210 Sustainable finance - Principles and guidance by providing requirements and guidelines on finance products and services which are the core business of sustainable finance institutions.

It is also intended to develop the document in accordance with existing ISO standards and those under development in TC 207 Environmental Management, TC 251 Asset Management, TC 309 Governance of Organizations, TC 68 Financial Services and TC 307 Blockchain and distributed ledger technologies. In developing the standard, we will continue to engage with external liaison organizations such as Climate Bonds Initiative, Global Alliance for Banking on Values.