Global Principles for Sustainable Securities Lending (Global PSSL) is making its draft principles available for consultation for the first time.
Global PSSL was born out of the now-defunct Council for Sustainable Finance, a semi-autonomous entity connected to the International Securities Lending Association and chaired by Radek Stech, who also serves as senior lecturer at Exeter University.
Stech now serves as CEO of the not-for-profit community interest company, which has taken on the council’s work in promoting global standardisation on environmental, social and governance (ESG) matters within securities lending markets.
The cornerstone of the project is the creation of a set of principles to assist financing markets to standardise their interpretations of what was ESG-friendly, known as the PSSL.
These principles represent the collaborative effort of more than 40 beneficial owners, agent lenders, prime brokers, hedge funds, data providers and other organisations that have contributed their time and expertise.
Global PSSL has now opened its principles to public scrutiny with a survey, which runs until the end of January.
The review period will give the broader stakeholder base an opportunity to examine and comment on this key component of the Global PSSL venture.
Global PSSL says a further engagement event will be announced during the consultation period.
“Our industry participants have voiced their determination to manage their ESG agendas through self-regulation from the start,” Stech says. “We have engaged with them on key issues such as collateral, short selling, and equal opportunity, to hone these principles into a workable voluntary code.
“We now welcome a cycle of refinement to ensure Global PSSL is fit for purpose.”
Stech adds: “We recognise that our initiative is ambitious, but we also believe that the times call for, and indeed demand, a global solution to the issues of sustainability and inclusion.
“By grounding our work in the day-to-day experience of practitioners in the market, we are ensuring that whilst our aims may be high, we are developing practical ways to meet them.”
Following this consultation the first version of these principles will come in the early Spring of 2021, although Stech says the principles will “evolve and adapt” over time.
Kenneth Gutwillig, executive director of the Global PSSL college of advisors, says Global PSSL will be informed “by uniting experts from diverse areas of finance, the College of Advisors will contribute our expertise to ensure that Global PSSL remains relevant to the market, and maintains its endorsees’ sustainability and ethical goals as a priority.”
Roy Zimmerhansl, strategic advisor on global practice and outreach, adds: “These global principles represent a solid middle ground between various interests, both in terms of types of organisations but also diverse regions.
“Following the review, the principles should be applicable globally, and drive sustainable securities lending in the years to come.”
