In collaboration with the financial services industry and the Department for Business, Energy and Industrial Strategy (BEIS), BSI launches the first PAS of its Sustainable Finance Standardization Programme to help define globally applicable standards for the finance sector.
BSI, the business improvement company, has released PAS 7340:2020 Framework for embedding the principles of sustainable finance in financial services organizations - Guide. The new guide provides a framework for financial services organizations that wish to be sustainable and better aligned with global initiatives like the United Nation’s Sustainable Development Goals (UN SDGs) and the Paris Agreement.
It is the first publication in the five-year long Sustainable Finance Standardization Programme, which has been designed and is being delivered in collaboration with UK Government (through the BEIS Energy Innovation Programme) and UK industry in support of the UK Green Finance Strategy.
Growing awareness of the urgent need to address global sustainability issues has driven increasing numbers of financial institutions to integrate environmental, social and governance issues into investment and ownership decisions. This PAS has been produced by a steering group of financial services industry representatives and associated organisations1. It aims to facilitate shared understanding and collaboration in the global finance sector around sustainability. The framework recognizes that transformation is needed to equip the industry to address issues including poverty, inequality, climate change, environmental degradation, prosperity, peace and justice.
The free to download PAS provides common terminology and a set of principles to help organizations identify, develop and maximize opportunities that address sustainability challenges.
Scott Steedman, Director of Standards at BSI said: “The financial services community has highlighted wide-spread challenges in aligning with sustainability movements like the UN SDGs and Paris Agreement, as each organization interprets and responds to the goals in their own unique way. Bringing together government and industry, we have helped to establish best practice with the publication of the first framework standard for embedding the principles of sustainable finance in financial services organizations. This is the first of three standards projects to be published by BSI as Publicly Available Specifications (PAS) and it provides the foundation for a harmonized global approach to sustainable finance.”
Kwasi Kwarteng, Minister of State for Business, Energy and Clean Growth, said: “Transforming our financial system for a greener future is vital as we protect the planet and move towards net zero while growing our economy. Building on our Green Finance Strategy, this guide will help the UK financial services sector become more sustainable and promote the global spread of sustainable finance, as the UK continues to lead the world in tackling climate change.”
Peter Young, Chair of BSI’s Sustainable Finance Strategic Advisory Group added: "The publication of this first PAS on sustainable finance meets a vital need to support the financial sector with clear guidelines and principles to underpin a successful approach to meeting sustainability goals. Industry and consensus led, it confirms the UK is at the forefront of developing and harmonising sustainability initiatives in the financial sector, also reflected in the UK leadership of the new ISO Committee TC322, which is working to deliver similar standards on a global basis."
The second PAS in the Programme, named PAS 7341 Responsible and sustainable investment management - Specification, is currently being developed. It is available for public comment until 28th February 2020 on the Standards Development Portal.
As part of BSI’s Sustainable Finance Standardization Programme, it has been appointed secretariat of the new international committee, ISO/TC 322, covering sustainable finance for the integration of sustainability considerations and environmental, social and governance (ESG) practices into institutional investment decision-making and wider finance management.