Asia Securities Industry and Financial Markets Association (ASIFMA), in cooperation with the Future of Sustainable Data Alliance (FOSDA), released a paper titled “ASIFMA-FOSDA Report on Data Challenges and Opportunities for ESG and Sustainable Finance in APAC” – a result of a year-long review of sustainability data challenges facing the industry in the Asia Pacific.
The paper follows from an interim report published in September 2020, and is based on discussions with market practitioners, industry representatives, standard setting bodies, as well as online events with regulators and sustainability specialists.
Some of the key ESG drivers and issues identified through a poll conducted earlier in the year, as well as through the online discussions facilitated by ASIFMA and FoSDA, include the increasing focus on ESG factors in light of Covid-19, the sustainable financing gap in Asia, inconsistent ESG data and lack of standardisation, as well as the need for policy and regulation to support innovation when solving data challenges.
“Another aspect of this is capacity building. With regard to sustainability, we’re really dealing with a complex, multi-dimensional issue and as ASIFMA has highlighted for some time, on sustainable finance, policies and industry efforts are needed to build capabilities across financial and other sectors in relation to scientific, operational, risk, reporting, governance, commercial and technological dimensions of ESG and sustainability,” said Matthew Chan, Head of Policy and Regulatory Affairs at ASIFMA.
Based on the review of these issues, ASIFMA puts forward 8 key recommendations, seen as critical to enabling the development and scaling of sustainable finance:
- A greater convergence towards a principles-based global (or at least regional) taxonomy.
- Higher, more consistent corporate disclosure standards between jurisdictions and sectors.
- Encouragement of higher standards of analysis, with incentives for more holistic and robust approaches to ESG measurement and analysis.
- Policy and regulation to support innovation and technologies that enable ESG and sustainable finance capabilities.
- A focus on education and skills to support ESG and sustainable finance capability.
- Higher standards and accountability for ESG ratings providers, potentially including regulation, and clear and harmonised requirements for product disclosure.
- Harmonisation between ESG standards and frameworks such as UN SDGs, and policy on climate change and bank supervision at systemic level, including on climate risk.
- Ongoing partnership and dialogue between the public and private sectors, as well as between stakeholders such companies and investors on disclosure and reporting standard.
The full ASIFMA press release can be found here.
ASIFMA is an independent, regional trade association with over 140 member firms comprising a diverse range of leading financial institutions from both the buy and sell side, including banks, asset managers, law firms and market infrastructure service providers.
ASIFMA is a partner of the Future of Sustainable Data Alliance (FOSDA) and is leading the workstream to understand data challenges for environmental, social, and governance (ESG) and sustainable finance in the Asia-Pacific region.
Launched at the World Economic Forum in January 2020, the Future of Sustainable Data Alliance brings global partners together to seek to solve the question of what data investors and governments need to meet the 2030 climate targets? Founding partners include the World Economic Forum, United Nations, IIF, OMFIF, Tsinghua University, ASIFMA, GFMA, Climate Bonds Initiative, FinTech4Good, Everledger, Institute of Public and Environmental Affairs, Spatial Finance Initiative, Bank of Africa-BCME and GoImpact, with membership growing with the recent addition of Icebreaker One.
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