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Monday, June 17, 2024

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ASEAN Capital Markets Forum to issue second version of ASEAN Taxonomy for Sustainable Finance this month

The ASEAN Capital Markets Forum (ACMF), in its 38th meeting hosted by the Indonesian Financial Services Authority or Otoritas Jasa Keuangan, announced that it will issue the second version of its ASEAN Taxonomy for Sustainable Finance by the end of March.

“[The ACMF] will continue to support the further development of the ASEAN Taxonomy as it completes the technical screening criteria of the taxonomy’s focus sectors in phases,” a statement read.

The first version of the taxonomy was issued in November 2021 as an overarching guide for ASEAN member states to enable an orderly transition and foster sustainable finance adoption.

The meeting of the high-level group of capital market regulators from all 10 ASEAN jurisdictions including Malaysia, Indonesia and Brunei, endorsed several other sustainable finance initiatives such as the second study phase of the Voluntary Carbon Market (VCM), the Sustainable Finance Knowledge Hub and the ASEAN Green Lane.

The second phase of the VCM study will focus on the disclosure guidelines on transition-related aspects, which will be undertaken by joint sustainable finance initiatives between ACMF and the Working Committee on Capital Market Development. The VCM study was initiated in 2022, driven by the role of carbon markets in contributing to ASEAN member countries’ net-zero transition.

In line with its efforts to develop and promote clear disclosure guidelines, the ACMF also agreed to hold regular engagement sessions with the International Sustainability Standards Board (ISSB) and explore future joint cooperation initiatives to promote consistent and comparable sustainability disclosure across ASEAN.

The ISSB is in the process of finalizing the general requirements of its exposure drafts IFRS S1 General Sustainability-related Disclosures and IFRS S2 Climate-related Disclosures, which are expected to be issued around the end of Q2 2023.

Also in the meeting, the ACMF approved the approach to develop the ASEAN Green Lane to facilitate cross-border offerings of ASEAN sustainable and responsible funds under the ASEAN Collective Investment Framework issued in late 2021, with the timeline for endorsement expected to be in September 2023.

The meeting further endorsed the Sustainable Finance Knowledge Hub, a one-stop center to raise awareness to participants on sustainable finance-related issues. The development of the online knowledge hub is currently under way and is expected to be launched by the end of March 2023.

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