IOSCO Statement on Disclosure of ESG Matters by Issuers

The International Organization of Securities Commissions (IOSCO) is this month publishing a statement setting out the importance for issuers of considering the inclusion of environmental, social and governance (ESG) matters when disclosing information material to investors’ decisions.

The statement does not supersede existing laws, regulations, guidance or standards or relevant regulatory or supervisory frameworks in specific jurisdictions, or any IOSCO Principles.

I. Introduction

As underlined by IOSCO in its Objectives and Principles of Securities Regulation, securities regulation has three key objectives: protecting investors, ensuring that markets are fair, efficient, and transparent, and reducing systemic risk. IOSCO Principle 16 states that issuers should provide “full, accurate, and timely disclosure of financial results, risk, and other information which is material to investors’ decisions.” With regard to this Principle, IOSCO emphasizes that ESG matters, though sometimes characterized as non-financial, may have a material short-term and long-term impact on the business operations of the issuers as well as on risks and returns for investors and their investment and voting decisions.

II. Developments in the disclosure of ESG information

Disclosure of ESG information in the market has increased in recent years. Examples of ESG matters that issuers are disclosing include environmental factors related to sustainability and climate change, social factors including labor practices and diversity, and general governance- related factors that have a material impact on the issuer’s business.

Cities Look to Shed Ratings While Taking on More Debt (WSJ)

One-fourth of municipal borrowing is given a single grade, leaving smaller investors with less information

Municipal officials and advisers said fewer ratings help cities trim expenses and save time when they borrow money for everything from school construction to sewer repairs. Bond issuers typically pay rating firms to issue a report. But some analysts said opting for one grade from a single firm puts smaller investors at a disadvantage as less information circulates through the $3.8 trillion municipal market.

Cities and counties across the U.S. don’t have enough assets on hand to pay for all future obligations to their workers, but how deep this deficit looks depends on what those cities expect to earn on their investments. Moody’s and Fitch impose their own calculations of pension liabilities while S&P relies more on government-provided projections.

First Annual U.S. Public Pension Governance Survey is Live

In partnership with Marquette University and Fund Governance Analytics (FGA), on June 1 we began sending out Governance Portal account activation credentials to over 300 organizations across the United States. Board and staff leadership of public pension systems over the next month have been invited to fill out the FEQ Governance Survey. This is the largest and most comprehensive survey of its kind ever undertaken, and we are excited to see both interest and early participation. For an overview of the topic, see Benefits Magazine article from January.

The 2018 survey closes on July 15. Organizations have up until that time to complete the 37-question survey to receive a free one-page report including their FEQ score along with peer universe benchmarks. The benchmarking information is valuable, not just from this year’s participants, but prior data collection representing 25% of the pension universe by assets, as it points to best practices among organizations. Our goal this year is to expand our data collection to over 50% of the universe.

During our research, we determined that stronger board governance (as measured by the FEQ score) can drive both higher investment returns and lower contribution requirements.

If your organization was not included among the initial group, there is still time for you to participate. Please send your request to, and we will add you to the survey group!