Asean exchanges formalise sustainability governance efforts | FinanceAsia

Asean exchanges formalise sustainability governance efforts | FinanceAsia

Six Asean-based exchanges released a list of ten governance objectives last week( September 12 ) that are included in the Common ESG Metrics of the regional bloc. The points make up the last item on a list of 27 thorough disclosure recommendations from regional market-listed companies that address plethora of environmental, social, and governance( ESG ) issues. The articles titled” E”( environment ) and” S “( social ) elements were released in March and December 2022, respectively.

According to Dr. Soraphol Tulayasathien, senior executive vice president and head of the Corporate Strategy and Sustainable Market Development Divisions at the Stock Exchange of Thailand( SET ), the complete list” serves as a common basis for member stock exchanges to build upon to drive sustainability among their listed companies.”

He told FinanceAsia that” each specific trade within Asean will defend the acceptance and importance of ESG metrics in the framework of their local market dynamics.”

In 2021, the ESG Working Group ( ESG WG ) was first established by the Asean Exchanges in six nations, including Bursa Malaysia, Hanoi Stock Exchange, Ho Chi Minh Securities Exchange ( HOSE ), Indonesia Stock Exchange ( IDX ), Philippine Stockex( PSE ), and SET. In response to the growing fame of ESG issues that have come to guide global funding decision-making as well as other owing application procedures, the members work together to lead local sustainability-themed initiatives.

” The Asean Exchanges have been working together to create a framework for collaboration across different areas to elevate the Assen capital market, and we are seeing encouraging progress ,” SGX’s spokesperson told FA. One is the creation of ESG measures. & nbsp,

Additionally, Tulayasathien exclusively disclosed to FA that IDX, SET, and Bura Malaysia had recently signed a Memorandum of Understanding( MoU) to work together on additional sustainability-related opportunities.

This deal” emphasizes the collective responsibility of these three exchanges to encourage the adoption of good ESG practices and to promote responsible progress within their particular markets.”

The MoU, according to him, aims to offer cross-border ESG investment opportunities throughout the Asean area. ” The official announcement of the MoU will be made to the public shortly. Please stay tuned ,” said & nbsp.

The announcement comes after various strategic initiatives that were just made in the area. The Hong Kong Exchanges and Clearing Limited( HKEX ) and IDX announced their collaboration in July to look into potential mutually advantageous opportunities.

At the time, experts told FA that the development would put both domestic and foreign investors operating in Hong Kong in a position to take advantage of opportunities related to Indonesia’s onshore energy transition story, particularly to access the market ‘ abundant nickel reserves and contribute to the country of Indonesia developing its domestic electronic vehicle ( EV ) supply chain.

In order to investigate opportunities in finance, ESG, and cross-listing, among other areas, the HKEX and Saudi Arabian share exchange operator signed a MoU earlier in February.

efforts for products

The Asean governance metrics were formalized at a meeting on September 8 that was also attended by representatives from the Lao Securities Exchange and Cambodia Stock Exchange( CSX ).

The leaders acknowledged the complementary nature of their exchanges and the potential for product improvement-based connectivity opportunities, such as depository receipts ( DR ) collaboration.

Tulayasathien stated that the Asean-based ESG WG had seen rising demand from local market participants for a wider range of investment opportunities when discussing the potential for new, cross-border product offerings.

With the addition of five fractional depositary receipts ( DRx ) on technology and growth stocks from the US and Hong Kong, the SET currently hosts a total of 13 DRs on its exchange platform, including foreign shares and exchange-traded funds ( ETFs ) from China and Vietnam.

The SET is prepared to launch a DR featuring Singaporean underlying stocks starting on September 19 as part of the strategic partnership known as the Thailand-Singapore Direct Relationship ( THR ) between Thailand and Singapore.

The SGX representative confirmed that the DR connection was started when it was first launched in May and involved four different companies.

The trading volume of DRs has grown significantly since its founding in 2018. To increase our global reach and offerings, we welcome the chance to expand collaborative initiatives with another exchanges, Tulayasathien said.

Along with the creation of the bank’s unique net-zero transition plan, the SGX is still looking into a wide range of tools to assist investors in incorporating climate considerations into their investment portfolios.

The spokesperson stated that in order to achieve this, we have expanded our selection of climate-themed goods and services, including the listing of the iShares MSCI Asia ex-Japan Climate Action ETF as well as our arrangements for electric vehicles metal.

This is on top of the Nikkei 225 Climate PAB future and our FTSE Blossom Japan derivatives, which were released in March of this year.

The Straits Times Index( STI ) constituents that had started concentrating on low-carbon solutions had outperformed the larger benchmark, according to the contact.

” Sembcorp Industries, Keppel Corporation, and Yangzijiang Shipbuilding have been actively growing their portfolios for renewable energy and cleaner or green solutions; the three stocks have averaged 46.8 % total returns in 2023 YTD, compared to 3.0 % total return for the STI.”

According to the International Sustainability Standards Board’s ( ISSB ) requirements, the Sustainability Reporting Advisory Committee ( Srac ) in Singapore opened a public consultation in July on the requirement of mandatory climate reporting for all publicly traded companies. According to the SGX director, the most recent period of conservation reporting among the listcos is expected to begin in Q4 2023.

Meanwhile, in Hong Kong, the Securities and Futures Commission ( SFC) released a thorough roadmap and nbsp last month for the implementation of ISSB standards in the market.

Governance improvements

The monthly performance evaluation of board directors and continued and constant professional education programs for such leaders are two of the ten Asean governance recommendations.

Directors of Singapore-registered listcos are required to take one of eight prescribed conservation courses in order to gain a fundamental understanding of sustainability issues, according to the SGX spokeswoman, who also shared progress to date.

” SGX mandated conservation instruction for all directors of listed companies in 2022 because we recognize the value of instruction.” Over 3, 200 people have so far attended the required courses.

The number of listed companies taking part in Thailand’s Sustainability Investment ( THIS ) assessment increased from 100 in 2015 to 221 in 2022, according to Tulayasathien.

The extraordinary advancement of Thai listed companies in the area of ESG practices, which has earned them world recognition, is one of our major accomplishments, he said.

The Dow Jones Sustainability Indices presently list 26 Thai-listed businesses, and the FTSE4Good and MSCI ESG index, both, list 42 and 41 listed companies. Thailand is currently ranked first in the ESG rankings for the ASEAN location thanks to this outstanding accomplishment.

He added that members of the Thai industry have access to a number of ESG education portals, such as the creative network known as SETESG Data Platform, which consists of two organizations: the Acadamy and the Pool.

The measures are meant to serve as a starting point for and to enhance ESG reporting practices by businesses throughout Asean, according to & nbsp.

According to Tulayasathien, the initiative emphasizes the significance of close, consistent, and pertinent ESG data, which investors are increasingly demanding both locally and globally.

Requests for comment were never answered by Bursa Malaysia, the Hanoi Stock Exchange, HOSE, IDX, or PSE. In addition, & nbsp,

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