Global watchdogs seek new ways to stop corporate 'greenwashing'       

Enterprise value reporting measures how climate and other sustainability-related issues can erode a company's total worth.

Companies should brush up on enterprise value reporting, a global securities watchdog has said, as regulators wrestle with the complex task of creating common international standards for corporate sustainability disclosures.

Enterprise value reporting measures how climate and other sustainability-related issues can erode a company's total worth.

To stop companies from 'greenwashing', or painting a flattering picture of their compliance with sustainability goals, standard-setters want to replace the current patchwork of disclosures with a global approach.

Global consistency would focus on enterprise value creation, said Ashley Alder, chair of IOSCO, an umbrella group whose board includes representatives of securities regulators from, among others, the US, China, Japan, major EU states, and Britain.

"That's a key new phrase everyone has to get used to," Mr Alder, who also heads Hong Kong's securities watchdog, told an Afore Consulting event. "Things are moving rapidly."

The EU's European Securities and Markets Authority chair Steven Maijoor, however, cautioned that a complete set of global disclosure standards would not be available in the short to medium term.

More broadly, for money managers and advisers keen to market their sustainable investing credentials to European clients, going green is about to get a lot tougher.

The new EU legislation, called the Sustainable Finance Disclosure Regulation, aims to help to drive €1trn into green investments over the next decade.

 

• Reuters