From enhanced enforcement combatting greenwashing to research into retail investors’ attitudes to ESG investing, the Ontario Securities Commission (OSC) has detailed its plans for increasingly incorporating sustainable finance into its work in the years ahead.
The regulator issued a report — informed by its new strategic plan and its annual priorities — that aims to provide insight into its approach to a range of sustainability issues.
“We believe that our regulatory approach will facilitate Ontario maintaining capital markets that are inviting, thriving and secure, and strengthen global efforts to successfully implement financial sustainability within the securities markets,” the report said. “Our ultimate goal is effective regulation of sustainable finance for competitive advantage, supporting positive change.”
Among other things, the OSC said it will “work to embed a sustainability mindset into our oversight and enforcement work,” including a more consistent, systematic inclusion of ESG-related considerations in its supervisory work.
For instance, the regulator indicated it will include sustainability considerations into its compliance reviews, “including the consideration of material climate-related risks and their potential impacts for public companies and reviews of registrant behaviour, especially as it relates to non-reporting issuers and their disclosure obligations in the private market.”
“Our objective is to improve disclosures regarding sustainability-related risks, opportunities and targets and reduce and respond to incidents of greenwashing,” it said.
The OSC also indicated it will beef up its own capacity to examine climate-related disclosures and to make better use of technology to help identify trends and risks in this area.
The significance of ESG factors within retail investing will also be a focus, the report said. This may include examinations of marketing and research into retail investor behaviours when investing in ESG.
Specifically, the OSC indicated it may carry out a “behavioural science experiment to examine which attributes of ESG funds are important to retail investors when selecting [ESG] funds.”
It also said it’s planning a study to assess the trends and impact of disclosure requirements that have now been in place for 10 years regarding women on boards and in executive positions.