Background
Sustainability is rapidly evolving into a mainstream feature of the international capital market and its importance is set to increase further as the world is facing up to environmental and social challenges. ICMA’s European Repo and Collateral Council (ERCC), as the principal representative body of the European repo and collateral market, recognises the growing importance of the sustainable finance market and is looking to help drive the development of repo and sustainability.
Reports
In April 2021, ICMA ERCC published an initial consultation paper on the role of repo in green and sustainable finance, exploring the sustainability aspects of repo and collateral as well as assessing the existing opportunities and potential risks in this area. The paper has been published alongside a list of consultation questions, asking firms to respond with their views on the subject by 4 June 2021.
In September 2021, a summary report was published to reflect the feedback received in response to this market consultation. The report summarised the consultation feedback, highlighting the key themes raised in the 20 responses that were submitted.
In October 2022, guided by members of its Repo & Sustainability Taskforce, ICMA published a second paper which sets out observations and categorisations relating to sustainability in the repo market. The paper is a reflection on recent market developments and looks at the different intersections between repo and sustainable finance from two perspectives: 1. wider sustainability considerations in the existing repo business, and 2. specific sustainability-related repo products that have emerged in the market.
In August 2024, ICMA published a summary report to reflect feedback received in response to its 2024 Repo & Sustainability Market Survey, which had been undertaken between February and March 2024. Building on the observations and categorisations from the 2022 paper on sustainability in the repo market, the survey aimed to deepen the understanding of existing market practices and identify issues for further reflection and future guidance.
Repo and Sustainability Task Force
ICMA’s Repo and Sustainability Task Force comprises representatives from the ERCC and from Members and Observers of the Principles. The overall objective of the Taskforce is to provide advice and promote dialogue around repo and sustainable finance. The aim is to (i) monitor, discuss and assess any existing or upcoming market and regulatory initiatives, (ii) coordinate and liaise with the ERCC Committee and the Executive Committee of the Principles and (iii) develop and publish joint guidance and market best practice if needed.
Three coordinators have been appointed to help drive the important work of the Taskforce. These are Sam Crawford, BNP Paribas as chair; as well as Carsten Hiller, Eurex and Iain Colquhoun, TD Securities, as vice-chairs.
Contacts
For further information about ICMA’s work in relation to Repo and Sustainability, please contact ercc@icmagroup.org or Zhan Chen, secretary to the ICMA Repo and Sustainability Task Force.
