Conversations about environmental, social and governance (ESG) considerations and the area of sustainability have steadily integrated themselves into corporate boardrooms across Asia.
A recent MSCI 2021 Global Institutional Investor survey revealed that around 79% of investors in the Asia-Pacific region increased ESG investments ‘significantly’ or ‘moderately’ in response to the Covid-19 pandemic. Meanwhile, 57% of investors in the region anticipated to have ‘completely’ or ‘to a large extent’ incorporated ESG questions into their investment analysis and decision-making procedures by the end of 2021.
Government authorities and business leaders from the continent have set out to increase awareness and respond to pressing calls from national actors to set environmental objectives and pursue ‘green’ goals. This has included a range of activities such as revising corporate governance codes, assigning monetary values to undesirable practices, and building green bond frameworks. The visible developments over the last few years indicates that ESG in Asia has firmly moved beyond being a box-ticking compliance exercise.
However, as a global challenge, there is little success associated with individual triumphs. Progress measured through a country-by-country view emphasises the need for more rigorous international guidelines, standardisation, and adherence to existing frameworks such as the Paris Agreement on Climate Change and the United Nations’ 2030 Agenda for Sustainable Development. There is little surprise to see improved channels of communication set up between national bodies to offer a harmonised response.
In collaboration with legal experts who are closest to the action, IFLR has produced its inaugural ESG Asia Report to provide an exclusive insight into how authorities and businesses are responding to the challenges.
The article by PwC Indonesia explains the importance of international collaboration on ESG framework standardisation, and provides recommendations on how Indonesia can act to strengthen its own regulatory framework.
In order to develop its ESG efforts, Japan has revised its corporate governance code. The authors from Oh-Ebashi LPC & Partners discuss the key changes for the board of directors, and evaluate how sustainability initiatives can be strengthened. Mori Hamada & Matsumoto’s article examines the challenges of standardising green bonds in the country and consider how they are accepted in the Japanese debt capital markets.
Shook Lin & Bok’s article inspects Singapore’s mandatory ESG disclosures for issuers, financial institutions, companies and suppliers, and weighs up the associated legal risks. The article from Eng & Co looks at carbon credits in the island nation and evaluates the practical legal considerations for businesses acquiring them to offset emissions.
In South Korea, Kim & Chang’s article explores how the emergence of ESG is related to paradigm shift away from the ‘shareholder supremacy’ approach of corporate management and towards the ‘stakeholder supremacy’ approach. Meanwhile, the article by Yoon & Yang explains how South Korea’s green goals and levels of legal compliance stacks up against global efforts.
We hope that you enjoy hearing from the legal experts leading the progression of ESG analysis in IFLR’s first Asia Report.
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Prin Shasiharan drives thought leadership with global legal advisors for IFLR’s insight projects, in addition to managing contributions from partner firms. He has hosted and moderated high-level events involving eminent legal practitioners. He also manages commercial collaborations for other Euromoney brands including The Deal, Managing IP and ITR.
Prin has experience in compliance, financial crime and regulatory roles, and has previously worked for international organisations including the United Nations and the Council of Europe.
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