Regulatory Round-up: Calls for ESRS and ISSB alignment, China’s green bond principles

Securities regulators, sustainable finance groups and investors have called for a closer alignment between the European Sustainability Reporting Standards and those of the International Sustainability Standards Board. In their feedback to the European Financial Reporting Advisory Group’s consultation on ESRS drafts, the European Securities and Markets Authority, Eurosif and others have stressed the importance of interoperability between standards. Esma noted how the structure used in the ISSB standards, and which was the starting point of the ESRS, has been “re-worked by [Efrag] into a more complex architecture.” Esma also would like a closer alignment between the concept of financial materiality in ESRS and that of enterprise value creation in the ISSB standards.

The UN-backed Net-Zero Asset Owner Alliance has asked the EU to prioritise the inclusion of specific reporting metrics for the oil and gas, aviation, steel and other energy-intensive sectors in the European Sustainability Reporting Standards, given policy makers’ “ambitious timeline” for the standards. The NZAOA, which represents 74 investors with $10.6tn in assets, also called for alignment and “full interoperability” with standards designed by the International Sustainability Standards Board.