BSI, the UK’s national standards body, has released the first output of a five-year programme to help define globally applicable sustainable finance standards for the financial sector.

PAS 7340:2020, as the publication is known, is one of at least two so-called Publically Available Specifications (PASs) that are to be developed under the sustainable finance standardisation programme, which is being delivered in collaboration with the UK government and industry.

It was produced with the help of a steering group of financial services industry representatives and associated organisations, including CFA Society of the UK, consultancy E3G, Lloyds Banking Group, the UK Sustainable Investment and Finance Association, the Principles for Responsible Investment, and asset manager WHEB Group.

Taking the form of guidance and recommendations, it provides common terminology and a set of principles to help organisations identify, develop and maximise opportunities that address sustainability challenges.

Scott Steedman, director of standards at BSI, said: “The financial services community has highlighted wide-spread challenges in aligning with sustainability movements like the UN SDGs and Paris Agreement, as each organisation interprets and responds to the goals in their own unique way.

“Bringing together government and industry, we have helped to establish best practice with the publication of the first framework standard for embedding the principles of sustainable finance in financial services organisations.

“This is the first of three standards projects to be published by BSI as PASs and it provides the foundation for a harmonised global approach to sustainable finance”

Scott Steedman, director of standards at BSI

“This is the first of three standards projects to be published by BSI as PASs and it provides the foundation for a harmonised global approach to sustainable finance.”

Peter Young, chair of BSI’s sustainable finance strategic advisory group, added: “The publication of this first PAS on sustainable finance meets a vital need to support the financial sector with clear guidelines and principles to underpin a successful approach to meeting sustainability goals.

“Industry and consensus led, it confirms the UK is at the forefront of developing and harmonising sustainability initiatives in the financial sector, also reflected in the UK leadership of the new ISO Committee TC322, which is working to deliver similar standards on a global basis.”

Young is also the chair of the aforementioned International Standards Organisation committee on sustainable finance.

Next stop: responsible and sustainable investment management

The BSI’s second PAS, which is under development, is on responsible and sustainable investment management.

According to the draft, which is available for public comment until 28 February, responsible investment management “considers material factors such as ESG considerations on financial risks and returns in the context of creating sustainable long-term value, while sustainable investment management additionally focuses on the impacts of investment on society and the environment”.

As per the BSI website, a third PAS on sustainable finance products and funds has been proposed and is in planning.

The three BSI standards projects were determined on the back of wide stakeholder engagement and scoping exercises carried out in 2018, before the official launch of the sustainable finance standardisation programme in July last year.

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