ESG round-up: Asian, Australian regulators announce ESG initiatives

The latest developments in sustainable finance.

South Korean financial regulator the Financial Services Commission has set up an advisory group to lead regulatory development on improving ESG disclosure rules, among five major focus areas. Dubbed a “financial regulatory reform committee”, it includes 17 private sector figures drawn from the finance, digital, law and media sectors.

The regulation arm of the Singapore Exchange (SGX) has announced an upcoming database which will provide investor access to corporate climate disclosures. According to The Straits Times, the resource will be named “ESGenome” and will have features to guide firm disclosure, including the ability to automatically generate sustainability reports.

It comes as the Global Reporting Initiative (GRI) launched a joint report with Singapore’s NUS Business School which analysed climate disclosures by the top 600 companies by market cap across ASEAN. Out of the sample size, 420 companies have published sustainability reports with disclosures relating to climate, led by Thailand and followed closely by Malaysia and Singapore. Topics with the lowest disclosure rates include the use of climate-related scenario analysis and the use of ESG-linked remuneration packages.

The Japan Exchange Group has launched an information platform collating information about ESG bonds and issuers, including their strategies, use of proceeds, impact and external reviews. Very few ESG bonds in Japan are listed, and much of this information “was previously scattered across the websites of individual issuers, review providers and securities companies”, according to JPX. The platform has been launched in partnership with seven unnamed major bond underwriters. The information platform is a key deliverable under the Japanese government’s sustainable finance programme.

Australian financial watchdog APRA has said it will provide clarification on the “linkages” between its guidance on climate change-related financial risks and its recently revised prudential standards (SPS 530), which set out the requirements for the country’s super funds. The planned draft guidance (SPG 530) will refer to stress testing, the regulator said, and will clarify “that ESG financial risk considerations are expected to cover matters beyond climate change financial risk”. The Australian Council of Superannuation Investors (ACSI) had called on APRA to make it clear that “prudent risk management requires consideration of ESG factors where they are financially material risks” in its consultation response on SPS 530. However, the standard makes no explicit reference to ESG or climate change. A spokesperson for ACSI told Responsible Investor: “It remains important that APRA clarifies its guidance to make it clear investment risk and governance considerations include ESG factors.” Currently, SPG 530 only refers to ESG factors in relation to potential for funds to offer an ethical investment option.

Data provider ICE has acquired emissions data firm Urgentem for an undisclosed sum. The firm provides Scope 1, 2 and 3 data for more than 30,000 securities. ICE said the acquisition would allow it to expand its climate risk offering to new geographies, scenario analysis and stress testing.