29 July 2021
Global PSSL issues a draft forward-looking standard to strengthen sustainable finance with interconnected collateral
Global Principles for Sustainable Securities Lending (Global PSSL) today published a draft forward-looking standard on how to strengthen sustainable finance with interconnected collateral within securities lending. (Available here)
The standard focuses on both the current agenda and future goals whilst recognising the need to increase transparency and maintain liquidity and safety in line with investor criteria. The current agenda was explored with several Global PSSL contributors as part of a new collateral workstream in 2021 and consulted with hedge funds as part of the Short – Long Investments and ESG workstream. The future goals draw on Stech’s research on green bonds and project finance as part of Sustainable Finance – the Law – Stakeholders (SFLS) Network of University of Exeter Law School and innovative collaboration with Roy Zimmerhansl, securities lending expert and Practice Lead at Pierpoint Financial Consulting and Global PSSL Strategic Advisor.
The paper was also shared as part of a broader review with Global PSSL contributors and regulators in Africa, Australia, the UK and the US.
The consultation period for this standard runs until 15th September 2021 and Global PSSL welcomes feedback from all interested parties. The formal issue will be published following this peer review.
Radek Stech and Roy Zimmerhansl said, “By strategically aligning securities lending collateral with ESG, the stakeholders will enhance broader sustainable finance agenda and reap long-term rewards. This standard encourages this forward-looking alignment by emphasising current practices and outlining pathways to more interconnected and ambitious future capacities. Such a progressive, step-by-step approach will increase transparency whilst assuring safety and liquidity.”
Global PSSL has received significant funding from the Economic and Social Research Council (ESRC), part of UK Research and Innovation, through Stech’s Sustainable Finance – Law – Stakeholders (SFLS) Network.
About Global PSSL
The Global Principles for Sustainable Securities Lending (Global PSSL) is the fundamental global mechanism for aligning securities lending with sustainable finance. This voluntary initiative has been developed through years of research based engagement between Dr Radek Stech, representing the SFLS Network at Exeter Law School, prominent beneficial owners and several agent lenders and other stakeholders committed to positive change.
In order to preserve its impartiality, the Global PSSL framework is based within its own independent community interest company, led by Dr Stech.