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The International Organization of Securities Commissions (IOSCO) is calling on issuers to address environmental, social and governance (ESG) issues in their disclosures to investors.

IOSCO, the umbrella group of global regulators, published a statement on Friday that sets out its views on the necessity of ESG disclosure by public companies. The statement says that issuers should “consider the materiality of ESG” factors to their business. And for issues that are deemed material, issuers should disclose the impact, or potential impact, on their financial performance and ability to create value.

When providing this disclosure to investors, IOSCO also says that issuers should provide insight into their approach to the governance and oversight of ESG-related risks. “Issuers can provide such insight, for example, by disclosing the methodologies they follow in their risk assessment, and the steps taken, and/or action plans developed, to address the risks that they have identified,” IOSCO says.

This new guidance comes amid increasing investor demand for ESG disclosure, IOSCO notes. “Today, investors’ interest in ESG disclosure is growing and some investors already significantly value ESG matters in their investment strategy. They highlight that such disclosures are necessary to supplement their investment and voting decisions,” IOSCO’s statement says.

“Transparency is an essential condition for investors to be able to make informed investment and voting decisions. Investors need to understand the material risks, including those related to ESG matters, posed to an issuer’s business and financial performance,” it adds.

Although some issuers are ramping up their ESG disclosure in response to rising investor demand, IOSCO sees a wide variance in these disclosures. Specifically, it says both the quality and the quantity of information varies between companies, and between countries.

The regulators stress that issuers’ ESG disclosures should be balanced and should reflect both the risks and the opportunities they face as a result of material ESG factors.

Along the recommendations to issuers, IOSCO says it’s considering the question of ESG disclosure, monitoring developments in this area and that regulators are discussing it among themselves.