The number of investor-related ESG disclosure policies in progress or in place around the world grew by 74% in 2020, according to monitoring by the Principles for Responsible Investment (PRI).
In a website update about the PRI’s regulation database, Hazell Ransome, policy analyst, also reported that the number of investor-related ESG integration policies was up by over 100% from 2019.
The situation concerning corporate ESG disclosure regulations was quite different however, with Ransome writing that in the past year, the growth in these regulations appeared to have begun to level off.
Policy aimed at corporate ESG disclosure is still the most prominent policy type identified by the PRI, however.
The PRI also distinguishes between “national sustainable finance strategies”, stewardship codes, taxonomies, financial products, sector-specific, and other types of policy interventions. Policies logged by the PRI can be originated by government as well as led by industry, with most being in the former category.
According to the PRI, in 2020 it identified 124 new or revised policy instruments, the highest number so far and 32 more than the previous year.
The PRI first published its database of global sustainable finance policy in 2016. According to Ransome, since the database’s last update in September 2019 the PRI increased its scope to cover all countries as well as international guidelines.
“This will allow us to track the uptake in responsible investment policy in countries that have recently started their responsible investment journey, and see which approaches are more popular,” she wrote.
“In future, we hope that this could lead to tracking the effectiveness of policies and their alignment with each other, which is vital to achieving sustainable, inclusive and zero-carbon economies,” Ransome added.
Another trend highlighted by Ransome is that in Europe, non-corporate-fcoussed policies are mainly based around investor ESG disclosure, including the sustainable finance disclosures regulation (SFDR), while in China, most policies, after corporate ESG disclosure, centred around financial products such as green bonds.
She also noted that in recent years, the proportion of voluntary policies plateaued to around one third of all regulations. “We are yet to see whether this plateau is a long-lasting trend or not,” she wrote.