ESG

The European Banking Authority (EBA) has just dropped a comprehensive look into how financial firms are handling Principal Adverse Impact (PAI) disclosures under the Sustainable Finance Disclosure Regulation (SFDR). This 2024 report shows progress on some fronts but also highlights areas where firms are falling short on compliance and best practices. For risk and compliance pros, this report sheds light on what firms are up against in meeting sustainability reporting standards and offers practical insights into how compliance frameworks are shifting to keep up with rising regulatory demands.

As the call for transparency in environmental, social, and governance (ESG) practices intensifies, a recent survey by Ernst & Young (EY) uncovers a troubling reality: both investors and finance leaders are increasingly skeptical about the credibility of nonfinancial reporting. This growing skepticism, exacerbated by perceptions of greenwashing and inconsistent data, highlights the critical role that ESG and governance, risk, and compliance (GRC) professionals must play in elevating reporting standards.

In a world where sustainability is no longer just a buzzword, asset managers find themselves facing complex, often thorny challenges around environmental, social, and governance (ESG) data. The Dutch Authority for the Financial Markets (AFM) recently put this into focus with an in-depth study, pulling back the curtain on the hurdles asset managers face in risk management and compliance tied to ESG.

The International Chamber of Commerce (ICC) unveiled its new Principles for Sustainable Trade Finance (PSTF) at Sibos 2024 in Beijing in effort to fight against greenwashing in global trade. The framework, developed in collaboration with leading financial institutions and Boston Consulting Group (BCG), addresses the critical challenge of evaluating sustainability in trade finance products.

The Securities and Exchange Commission (SEC) has taken action against New York-based investment adviser WisdomTree Asset Management Inc. for making false statements and failing to comply with its own investment criteria for ESG-marketed funds. The charges, announced on October 21, 2024, highlight the growing scrutiny of environmental, social, and governance (ESG) investment practices in the financial industry.

The world of environmental, social, and governance (ESG) risks has long been under scrutiny, and one of the key issues that continues to generate concern is greenwashing – the practice of making misleading claims about the environmental benefits of a company’s products or initiatives. RepRisk’s 2024 report on greenwashing has drawn attention to a significant, yet nuanced, shift in the greenwashing landscape. For the first time in six years, there has been an overall decline in the number of greenwashing incidents, though high-risk cases have surged, underlining an evolving and more complex regulatory landscape.

The International Financial Reporting Standards (IFRS) Foundation has unveiled a comprehensive guide to support companies in voluntarily adopting the International Sustainability Standards Board (ISSB) Standards. This initiative, titled "Voluntarily applying ISSB Standards—A guide for preparers," responds to the growing global investor demand for comparable and decision-useful sustainability-related disclosures.