ICSF Update

COVID-19 | EU Renewed Sustainable Finance Strategy Consultation | New Members & Partners

Summer has brought some welcome rays of hope, as many parts of Europe ease their COVID-19 restrictions, and businesses work to re-open. This emergence, and the unprecedented impact of the lockdown will be a testing time for everyone, especially for those developing nations who lack sufficient reserves or the credit lines of others. At times like these, more than ever, it is our responsibility as leaders in sustainable finance, to demonstrate maturity and strong leadership by reaching out to others and leaving no one behind.

We explored some of these connections during our preparations for the upcoming EU renewed sustainable finance strategy. This consultation offers a possibility to consolidate EU understanding of sustainable finance, and covers many aspects of sustainable finance, including accountability, green securitisation, and green bond mechanisms. Securities lending is a finance dynamic which is growing in importance globally and contributes to market liquidity. This, in turn, translates into a well-functioning real economy which benefits all levels of society. We want to strengthen this in our response, but also emphasise that there is lots of innovation in this sector that may bring solutions to the broader sustainable finance market. Those solutions can be offered through global connections that we, at ICSF, put emphasis on. For example, the European Commission wants to know what they can “do to facilitate global coordination of the private sector (financial and non-financial) in order to deliver on the goals of the Paris Agreement and/or SDGs”. I think our ICSF approach to global Principles for Sustainable Securities Lending (PSSL) and partnerships, will serve as an effective basis for our reply to this question.

Since our last update, I am delighted to announce two new ICSF members; firstly MN Services based in the Netherlands, together with Sumitomo Mitsui Trust Bank (SuMiTB), Japan. The positive feedback on the earlier ICSF position papers attracted like-minded organisations to the fold. It’s also good to welcome two new ICSF partners – the Risk Management Association (RMA) in North America, and BNY Mellon (Agency Securities Lending). As per our governance structure, applications for ICSF partnership are received by the Chair in the first instance, and are welcomed on the understanding that they genuinely support global PSSL and actively encourage beneficial owners to consider ICSF membership.

In line with ISLA’s mandate to its members, ICSF will focus its efforts on promoting sustainable finance predominately in the EMEA region. However, it is acknowledged by all that PSSL must be global in reach, so that it sets out a clear direction of travel for the wider securities lending community. I will soon develop a broader sustainable finance platform at the University of Exeter, and use it to also help facilitate global PSSL and coordinate regional developments with ICSF partners. This new platform will emphasise the broader development agenda and sustainable finance impact. Then, ICSF and its global partners can support this high-level global alignment. At the same time, I will continue to lead ICSF and create clear guidelines in the EMEA region that will then feed into developing global PSSL alongside our partners. Further communication will be issued in the coming days, but please feel free to contact me with any questions.

Radek Stech, Chair of ICSF

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