World Council of Credit Unions releases guide to international sustainable finance regulations
International Advocacy publication highlights what credit unions need to know in 2023
MADISON, WI (March 21, 2023) — World Council of Credit Unions Tuesday issued “What Credit Unions Should Know About Sustainable Finance”, a guide to help credit unions understand many of the international standards and emerging regulatory frameworks surrounding climate-related and sustainable finance issues.
World Council has been working on this issue for many years, so that international standard setters tailor regulations to accommodate the credit union cooperative model. Further, World Council has been working to position credit unions as a differentiator on ESG-related issues, while ensuring that the benefits of the member-owned, not-for-profit model are contemplated.
“The past few years have dictated the need for flexibility in all areas of our lives, and the need to adapt holds equally true for the regulatory landscape. Credit unions must be ready to undertake new sustainable finance requirements, while finding new and innovative ways to support climate resilience,” said Panya Monford, World Council Assistant General Counsel of International Advocacy.
Specifically, the publication covers:
- How global frameworks are supporting climate change and sustainability. Global authorities set global standards and thresholds by which all supplementary standard setters and regulators should abide.
- How global and international standard setters are addressing climate change through guidance and regulation. While global frameworks are concerned with climate change en bloc, global standard setters are drafting regulatory guidance and regulation that not only supports climate-related matters, but issues that affect the environment, as well as investors who desire to be informed about the environmental risks associated with their investments.
- The need for global standard setters to require regulatory authorities at the national level to adhere to proportional regulation. This will ensure that small financial institutions are not overregulated by rules that are tailored for large, systemically important banks. Generally, standard setting bodies construct the rules, while regulatory authorities (typically at the national or jurisdictional level) enforce them.
- The commitment to sustainable finance and climate-related issues by the Basel Committee, International Accounting Standards Board, G20, European Commission, Financial Stability Board and European Securities Market Authority. While these standard setters are not the only authorities involved in structuring climate-related, sustainable finance rules, they are the leading authorities shaping sustainable finance regulation.
As implementation of these final and in-progress standards are adopted at the national level, this will be an evolving and emerging area where it is critical to ensure that the credit union voice is heard.
You can view and download a copy of “What Credit Unions Should Know About Sustainable Finance” by clicking here.
About World Council of Credit Unions
World Council of Credit Unions is the global trade association and development platform for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented 300+ technical assistance programs in 90 countries. Worldwide, 87,914 credit unions in 118 countries serve 393 million people. Learn more about World Council's impact around the world at www.woccu.org.