In February 2023 the British Standards Institution (BSI) unveiled a new sustainable finance standard to help financial organisations avoid greenwashing by setting credible ESG plans.
At the launch of BS ISO 32210:2010, Scott Steedman, Director General of Standards at the BSI, said the standard provides a framework for organisations that wish to be better aligned with global initiatives like the United Nation’s Sustainable Development Goals (UN SDGs) and the Paris Agreement. This report by Mark Stoddart of industry consultants Finativ. looks at what the standard is designed to achieve.
The world today grapples with a series of existential crises: climate change, ecosystem degradation, escalating poverty, and relentless water stress. With a swelling global population predicted to hit 9.7 billion by 2050, we are at an inflection point. The consequences of increased consumption and pollution are becoming ever more evident and pressing.
Historically, financial services have been instrumental in providing investors, lenders, and borrowers with crucial services in risk management and capital allocation.
But today, their role has extended far beyond the traditional remit. They are now playing a vital role in the transition to a more sustainable economy, helping to tackle the impacts of environmental degradation, social inequality, and economic instability.
The journey towards a sustainable economy is fraught with challenges. It necessitates a transformational change in the sector to cater to sustainability needs and simultaneously thrive during this transition.
BS ISO 32210:2022
To aid this huge challenge, a new British Standard, BS ISO 32210:2022, has been developed. This serves as a blueprint to guide finance firms on their path towards sustainable development. This standard helps organisations:
Integrate sustainable finance principles: By infusing these principles into core operations and services, finance firms can pivot towards sustainability.
Align with emerging regulations: As expectations from stakeholders and market opportunities evolve, alignment with these shifts can foster responsible growth.
Mitigate risks: Through enhanced control and prevention of ‘greenwashing’, firms can effectively manage sustainability impacts.
Demonstrate continual improvement: Showcasing ongoing enhancements in sustainability outcomes can solidify a firm’s reputation and trust.
Increase transparency: A transparent approach to policies, processes, and sustainability performance builds stakeholder confidence.
Strengthen internal governance: Improved operational rigour and governance promote efficient execution of sustainability initiatives.
Asset finance organisations embarking on their sustainability journey should partner with professional services providers who have programmes specifically designed to help firms meet their sustainability goals whilst complying with the new British Standard. Such partnerships offer a powerful combination, enabling financial institutions to navigate the landscape of sustainable finance.