Institute of International Finance (IIF)

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Washington, D.C., United States

The Institute for International Finance (IIF) has communicated top-line support for some sustainable finance policy, but has cautioned against a prescriptive approach to regulatory intervention in this area.

IIF has stated support for the role of the finance industry in meeting the Paris Agreement but has not clearly articulated the need for systemic reform to the financial sector. IIF has stated top-line support for regulation to encourage scaling up ‘green’ investment but has not clearly supported regulation that would curtail damaging activities. IIF has argued for greater global alignment of regulation on sustainable finance, although seemingly in some cases also cautioning over the development of national or regional policies instead of focusing on a coordinated, global policy approach. However, in 2022, IIF also raised numerous objections when responding to consultations on global initiatives, including the ISSB disclosure standards and the FSB climate risk recommendations.

IIF appears to have a mixed but generally negative position on regulated corporate ESG disclosure. In 2020, IIF stated support for policy to improve corporate ESG disclosure and was active in promoting the TCFD, although also warned against the "burden of unnecessary disclosure". IIF also wrote to the European Commission to comment on the review of the Non-Financial Reporting Directive (NFRD) in 2020, broadly supporting the need for regulation on ESG disclosure but cautioning that "independent development of an EU specific standard could contradict with objectives of promoting a globally consistent approach." Likewise, in a 2021 response to the SEC's request for public input on climate change disclosures, IIF took a mixed position on the need for regulated corporate disclosure, supporting the development of a disclosure framework with some exceptions. After the SEC released its proposed climate disclosure rule in 2022, an IIF blog post stated that there were "significant challenges and concerns" with the proposal. IIF detailed these concerns in its June 2022 comment letter to the SEC, objecting to several of the proposed quantitative and qualitative disclosure requirements. IIF stated broad support for the global sustainability reporting standards developed by the ISSB, but in feedback in July 2022 outlined numerous objections to the draft standards.

In 2019-20, IIF stated broad support for the need for a taxonomy on its website, whilst arguing in letters to the TEG, NGFS and DG FISMA for a simpler and less prescriptive approach to classification. In the letter to DG FISMA, IIF also argued for the taxonomy to remain voluntary, at least in the short-term, and for weaker thresholds for economic activities to be classified as 'green', including appearing to argue for the generation of electricity from natural gas. In response to the Commission’s consultation on the Renewed Sustainable Finance Strategy in 2020, IIF argued against the expansion of the taxonomy to environmentally harmful activities.

In feedback on the FSB consultation on Supervisory and Regulatory Approaches to Climate-related Risks in June 2022, IIF did not appear to support the FSB's suggestion that regulators may need to consider integrating climate risk into macroprudential regulation

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