ESG regulatory tracker tool launched by Sustainable Fitch

Sustainable Fitch has launched a regulatory tracker tool, aiming to bring clarity to the fast-evolving and complex regulatory environment in the ESG space. According to Sustainable Fitch, it monitors sustainable taxonomies, ESG corporate disclosures, climate-related corporate disclosures, and ESG fund requirements and disclosures.

Sustainable Fitch said it also tracks the most important ESG disclosure standards and their progress, and aims to provide a succinct summary and guidance on the new regulatory issues that could affect issuers and investors in those ESG areas. The database is updated on a quarterly basis.

In an accompanying report, Sustainable Fitch said ESG regulations continue to make headways, and sustainable taxonomies, mandatory climate disclosures and ESG fund rules are rapidly gaining ground. It noted some of the most notable updates in 2023 include:

• Taxonomy developments in Brazil, Mexico, ASEAN and the EU, with increasing local and transition considerations;
• The rise in ESG fund regulations, in Japan, South Korea and the EU, where the Sustainable Finance Disclosure Regulation Level 2 requirements came into force;
• Mandatory corporate climate disclosure making progress in Hong Kong;
• In India, SEBI’s consultation paper on ESG disclosures by listed entities, ESG ratings in the securities market and ESG investing by mutual funds.

Looking ahead, Sustainable Fitch noted the progress of the US SEC’s climate reporting rule, which has recently been delayed to 3Q23. It noted that some of the more controversial aspects of the draft rules based on the official feedback received, including some thresholds for certain disclosures, may be pared back. It also pointed to the release of the draft UK green taxonomy, also planned for 3Q23.

Sustainable Fitch said the final draft of the International Sustainability Standards Board (ISSB), expected in late 2Q23, is likely to be a regulatory milestone, being the first international ESG standard. “Progress on the ISSB – which seeks to become the globally recognised standard for sustainability-related financial reporting – is continuing, with the IFRS continuing to consult on its draft standards ahead of the formal roll-out in January 2024,” said Sustainable Fitch.