The International Securities Lending Association (ISLA) has formed a Council for Sustainable Finance (ICSF), amid wide-spread market debate around the compatibility of asset managers’ lending programmes and the growing trend of socially-conscious financing.

The council will be chaired by Radek Stech, who is also council chair and founder of the Sustainable Finance, the Law, Stakeholders (SFLS) network at Exeter Law School.

It will sit for the first time in Q1 2020 and will operate for a five-year term. ISLA was not immediately able to provide further details on other council members.

Primarily, ICSF aims to introduce “wide-ranging solutions for sustainable securities lending” through the introduction of a set of principles for sustainable securities lending (PSSL).

According to ISLA, the PSSL is a voluntary rules framework aimed at promoting environmental, social and governance (ESG), sustainable development goals, and long-term thinking into securities lending activities. Of his new role, Stech said: “A recurring theme, from the dozens of interviews and working groups I have held, is that industry is crying out for a strong and practicable set of principles.

Principles that allow for growth but recognise that sustainability is of equal importance.” The PSSL is currently undergoing formal approval and is the result of an industry working group with active contributions from several beneficial owners.

The association confirmed that numerous beneficial owners, representing pension funds and global asset managers, have already initiated these principles.

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