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Harmonising ESG protocols
A panel convened at The Network Forum ’ s Athens meeting in June to discuss the state of play with ESG in the asset servicing world saw participants agreeing that more needs to be done to harmonise procedures across the ESG agenda – from regulation to data reporting . Virginie O ’ Shea , founder of Firebrand Research , highlighted research conducted by the firm that found there are circa 2,500 different ESG regulations around the world , with 773 alone in Europe – and the difficulties that presents for organisations working in the industry . “ The main difficulty here is to try and link all of these regulations together ,” said Fouad Massabni , head of the ESG commercial offer at Societe Generale Securities Services . “ There are financial market participants , banks , asset managers , asset owners – the whole chain is impacted differently by different regulations . When you are a big institution like Societe Generale , the real challenge is to make sense of the impact across the different areas of the bank .” CACEIS ’ s head of regional coverage for Spain and Latin America , Elena
24 Securities Review Q3 2023
As Sibos participants in Toronto prepare to discuss how to advance ESG consideration , what lessons can be drawn from The Network Forum ’ s AGM in Athens ?.
Mesonero added that the industry is still in the process of digesting the different levels of regulation – with more clarity and collaboration needed on the implementation of the measures . “ To be able to advise our clients , we need more than ever to come together to see how we can complement each other – we cannot do it individually , because it will never work .”
Consistent reporting on the wishlist While global regulatory harmony is probably unlikely , one area that could be improved is the provision of more consistent data reporting . Currently , there is an issue for asset servicers around the different standards and practices of ESG reporting – something which Massabni picked up on : “ Every asset manager has their own set of data , and sometimes their own methodologies as well . It ’ s difficult to screen and to validate whatever that manager is doing . Everything today is still hazy ; we ’ re not there yet .” Adding servicer requirements and ratings agencies to the mix only adds further friction to an already incohesive environment , panellists agreed , with a more standardised approach critical for the development of the market . On a positive note , the fact that the ESG question is gaining increasing traction throughout the market is helping to drive that change and improve reporting standards . “ We ’ ve seen a fundamental shift over the last 10 years and that ’ s going to increase ,” said Michael Kempe , head of business development at Proxymity . “ Social media has played a part in that , and so has globalisation . Investors are now investing globally rather than locally and the sustainability approach that goes with it is really important .” The panel added that the regularity of climate crises often puts environmental concerns towards the top of investor strategies , while the newer generation of investors are increasingly interested in the ESG policies of the businesses they are working with . All of this combined has helped to further the effectiveness of wider industry ESG policy . “ The ball is rolling , it ’ s a long journey but it has started ,” concluded Massabni . “ We need to work together to keep moving along that journey .”