ICSF Update

Global Principles for Sustainable Securities Lending | Renewed Sustainable Finance Strategy Consultation | New Partners

Welcome to the summer edition of the ICSF blog.

My last blog began with cautious optimism, and although there are persistent signs of the much-feared ‘second wave’ emerging across Europe, it’s reassuring to see that governments are reacting quickly and people are paying attention to new guidelines. Global society has displayed responsible behaviour, which demonstrates  our ability to adapt when needed. This crisis is presenting an opportunity for much of the world to reinvent itself, and sustainable securities lending with its market-smoothing effects, is playing a significant role in this transformation. I therefore encourage all beneficial owners engaged in securities lending in the EMEA region to join ICSF, so that we can make that significant impact together.

At ICSF, we have written and spoken of how securities lending as a distinct finance dynamic, is effective at mitigating the effects of market volatility. In July, I had the pleasure alongside Roelof Van der Struik of PGGM and several ICSF partners, of participating in a session on ESG as part of a securities finance webinar series organised by ISLA and Global Investor Group ISF. In recognition of ISLA’s broader mandate, ICSF also finalised a separate response to the European Commission’s consultation on their renewed sustainable finance strategy,  emphasising the need to move incrementally to advance sustainable finance across Europe. We drew the European Union’s attention to the evolving Principles for Sustainable Securities Lending (PSSL) that are setting a standard for sustainable securities lending. I have taken the lead to revise and strengthen these Principles on an independent basis, to accommodate the global dimensions of the market by early autumn. ICSF will promote Global PSSL as a standard that the European Union can hopefully recognise as part of its efforts.

I am delighted to report that the ICSF family has grown once again,  with new partnerships with  eSecLending, JP Morgan, RBC Investor & Treasury Services, and State Street. I cannot emphasise enough the value we place on these relationships, each offering their own wealth of wisdom and experience with which to reinforce the Council’s ongoing mission. Our new partners will also help us grow our beneficial owner membership base with the focus on the EMEA region.

I am also looking into the near future as there is growing evidence that this crisis would have done a lot more damage, had it not been for the liquidity that securities lending facilitates. I will review this evidence and provide more extensive reflections in our annual report in early autumn. Moreover, I have started some preparatory work towards ICSF guidelines that will focus on providing more detailed guidance on how to implement and make the most of the Global PSSL for our members in the EMEA region.

Last but not least, I delighted to see recent proposals made by ISLA and other EMEA associations, “to define and promote the development of a digital future for financial markets”.  I have a long-standing interest in FinTech and digital finance which have significant impacts on sustainability, and look forward to following these developments and embedding them in our work over the next year or so.

Meanwhile, as we are at the height of the European summer, I hope that you’re able to enjoy the season whether out and about or relaxing at home.

Radek Stech, Chair of ICSF

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