Collaborative Efforts to Implement Common ESG Metrics Spearhead Asean-Interconnected Sustainability Ecosystem
KUALA LUMPUR – In a landmark move toward regional sustainability, stock exchanges from Malaysia, Indonesia, Thailand, and Singapore have joined forces to establish the Asean-Interconnected Sustainability Ecosystem (Asean-ISE). This initiative aims to drive the advancement of sustainable development across the ASEAN region through the adoption of common Environmental, Social, and Governance (ESG) metrics integrated into their respective data infrastructures.
Formalization of Asean-ISE Initiative
A recent meeting between the participating exchanges culminated in the formalization of the Asean-ISE initiative. During this meeting, key agreements were reached regarding the foundational governance structure and operational blueprint for the establishment of this interconnected sustainability ecosystem. The collaboration underscores a shared commitment to fostering sustainability and addressing pressing environmental and social challenges within the region.
Collaborative Efforts and Objectives
The participating stock exchanges issued a joint statement outlining the objectives and intended outcomes of the Asean-ISE initiative. Key highlights of their collaborative efforts include:
- Integrated ESG Ecosystem: The creation of an integrated ESG ecosystem aimed at promoting sustainable development across ASEAN nations.
- Cost Efficiency and Time-to-Market: Enabling participating exchanges to achieve economies of scale through cost-efficient solutions and faster time-to-market strategies.
- Empowering ESG-Compliant Corporates: Proactively assisting ESG-compliant corporates in maximizing business value through quality disclosures and fostering transparency.
- Infrastructure Solutions: Developing infrastructure solutions to facilitate cross-border trade flows and connect corporates’ supply chains to ESG-oriented investment capital.
- Promoting Good ESG Practices: Providing suppliers with guidance on good ESG practices and disclosures to secure competitive financing rates.
Bursa Malaysia as Asean-ISE Secretariat
Bursa Malaysia has been designated as the secretariat for the Asean-ISE initiative, tasked with facilitating the successful execution of its objectives. This pivotal role underscores Malaysia’s commitment to driving sustainable development efforts within the ASEAN region and ensuring the effective coordination of collaborative initiatives among the participating exchanges.
Vision for an Inclusive Ecosystem
Datuk Muhamad Umar Swift, CEO of Bursa Malaysia, articulated the vision for an open and inclusive ecosystem where participating exchanges operate within a trusted and fundamentally aligned data infrastructure. This vision is supported by the development of comprehensive modular-based solutions tailored to the specific market needs and conditions of each participating exchange.
Roadmap for Implementation
The participating exchanges are set to reconvene to finalize the implementation details of the Asean-ISE initiative. This process will culminate in the formalization of the ISE Governance Framework and Operating Structure at the 37th ASEAN Exchanges CEOs Meeting, scheduled to be held in July 2024 in Malaysia. The roadmap outlines a strategic approach to achieving the objectives of the Asean-ISE initiative and underscores the commitment of participating exchanges to driving sustainable development within the ASEAN region.
Asean-ISE Governance Framework and Operating Structure
Table: Overview of Participating Stock Exchanges
| Stock Exchange | Country |
|---|---|
| Bursa Malaysia | Malaysia |
| Indonesia Stock Exchange (IDX) | Indonesia |
| Stock Exchange of Thailand (SET) | Thailand |
| Singapore Exchange (SGX) | Singapore |
Strengthening Regional Collaboration for Sustainable Development
The establishment of the Asean-ISE initiative signifies a significant step forward in fostering regional collaboration and solidarity towards sustainable development goals. By leveraging the collective expertise and resources of participating stock exchanges, the initiative aims to address the complex challenges facing ASEAN nations, including climate change, social inequality, and environmental degradation.
Enhanced Market Resilience and Competitiveness
Through the implementation of common ESG metrics and the development of interconnected sustainability infrastructure, the Asean-ISE initiative is poised to enhance market resilience and competitiveness across the region. By providing investors with greater transparency and access to ESG-related information, participating exchanges can attract responsible investment capital and promote the growth of sustainable businesses.
Empowering ESG-Compliant Corporates
One of the core objectives of the Asean-ISE initiative is to empower ESG-compliant corporates to maximize their business value through quality disclosures and transparent reporting practices. By providing guidance and support to corporations in adopting and implementing ESG standards, participating exchanges can catalyze a shift towards more sustainable business practices and responsible corporate governance.
A Catalyst for Innovation and Collaboration
The Asean-ISE initiative serves as a catalyst for innovation and collaboration within the ASEAN financial ecosystem. By fostering an open and inclusive environment for knowledge sharing and best practices exchange, participating exchanges can leverage collective insights and expertise to drive continuous improvement and innovation in sustainable finance solutions.
Charting a Sustainable Future for ASEAN
As the Asean-ISE initiative gains momentum, it is poised to play a pivotal role in charting a sustainable future for ASEAN nations. By promoting collaboration, transparency, and accountability, participating stock exchanges can accelerate progress towards achieving the Sustainable Development Goals (SDGs) and building a more resilient and inclusive economy for generations to come. Through sustained commitment and collective action, the Asean-ISE initiative has the potential to create lasting positive impact and pave the way for a more sustainable and prosperous ASEAN region.
Featured Image Courtesy of DALL-E by ChatGPT