Financial institutions - KPMG United Kingdom

ESG & Sustainable Finance tops regulatory agenda

ESG & Sustainable Finance (8.9) topped the scores of the nine themes measured by the Regulatory Barometer. This was attributed to the sheer volume of new and developing initiatives, and the challenges of implementing detailed requirements rapidly to support environmental policy targets.

Smith added: “Sustainability has rightly been at the top of the regulatory agenda for some time as wider ESG concerns are the issues most discussed by regulators, industry and investors around the world, spurred on by the common understanding of finance’s role in reaching net zero. That trend is clear from our study as sustainability finance scored well above any of the other regulatory themes, even well-established areas such as financial resilience and the fast emerging world of digital finance.

“On the ground, we are seeing more commitments to reaching net zero driving change in financial services as stakeholders and investors demand greater transparency. Focus is also increasing in areas such as nature and biodiversity, the circular economy and broader social impacts and the ‘just transition’. The scope of regulatory rules, frameworks, standards, taxonomies and other guidance is wide ranging and increasing, covering initiatives from corporate reporting to prudential disclosures and transition plans, risk frameworks and stress testing to ratings and data.”

KPMG Regulatory Barometer impact scores

The next edition will be published in Q1 2023 and every six months thereafter.

ENDS

*Notes to editor

KPMG’s analysis results in a single metric – a regulatory Impact Score – aggregated from individual theme scores. Each score is based on data analysis of the volume of regulatory updates, the complexity of the underlying rules and the challenges of implementation, and supported by the views of the firm’s regulatory experts. The data is drawn from KPMG’s Regulatory Horizon technology and scans the regulatory landscape over the past six months. In addition, maturity indicators demonstrate progress made in each area of ​​regulation, from ’emergent’ through ‘developing’ to ‘implementing’ and ‘mature/BAU’, alongside views on where key EU:UK regulation is likely to align or diverge.

The full KPMG Regulatory Barometer can be found at: https://home.kpmg/xx/en/home/insights/2022/08/regulatory-barometer.html

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