ISO publishes a new international guidance on sustainable finance – ISO/TR 32220

Mitigating climate change impacts and reaching carbon-zero goals and the United Nations Sustainable Development Goals requires exorbitant sums of money. Given this, sustainable finance might come in as a powerful solution and a growing industry. Yet, there is still a lack of clear understanding what it is and how it can be put in place. International organization for standartization (ISO) has just published  a new guidance to create a common language and drive confidence in this essential market.

ISO/TR 32220, Sustainable finance – Basic concepts and key initiatives, provides the first internationally agreed glossary of terms and definitions that the whole world can use to enhance understanding and uptake in the industry. The technical report (TR) features a non-exhaustive list of terminology commonly used in financial markets, intended to guide financial regulators, banks, asset managers, investors, researchers and more.

Bolu Wang, Convenor of the group of experts that developed the guidelines, said the TR will help readers with different backgrounds understand the fundamental building blocks of the sustainable finance system.

“It will help to accelerate convergence of global efforts to deliver sustainable finance. It is just the first of many initiatives we have in this field, as we work with more and more experts to track the evolution of multiple key topics to identify areas for future standards.”

ISO/TR 32220 will soon be joined by the upcoming ISO 32210, Framework for sustainable finance: Principles and guidance. Together, they will consolidate concepts that exist and set out a common terminology, as well as international best practice and guidelines for the industry. This will then provide a platform from which organizations involved in sustainable investment can develop their products further and enable more players to enter the market.

These standards follow the recently published ISO 14097, Greenhouse gas management and related activities – Framework including principles and requirements for assessing and reporting investments and financing activities related to climate change, which helps financiers assess and report on their actions and see the real value of their contribution to climate goals.

ISO/TR 32220 is the first guidance document from ISO’s recently established technical committee dedicated to the sector (ISO/TC 322, Sustainable finance), whose secretariat is held by BSI, ISO’s member for the UK.