THE Securities and Exchange Commission (SEC) participated in the 37th Asean+3 Bond Market Forum (ABMF) Meeting held last July 24 to 27 in Tokyo, Japan. The meeting was held jointly by the Asian Development Bank (ADB) with the Asia-Pacific Financial Forum under the APEC Business Advisory Council, XBRL Asia Roundtable and the Asia Business Law Institute.
ABMF, a regional platform created by the Asean (Association of Southeast Asian Nations) member states (AMS) with the People’s Republic of China, Japan and the Republic of Korea (Asean+3), integrates the Asean+3 markets by standardizing and harmonizing regulations and market practices vis-a-vis cross-border bond transactions. Meetings of the ABMF are held thrice a year, bringing more than a hundred experts in financial market developments and regional financial cooperation together.
The meeting zeroed in on the regular updates on ABMF’s activities, and undertook discussions on several issues on Sustainable Finance and Digitalization. I, for one, was engaged to speak in one of the sessions at a panel discussion on the “practical approaches in moving toward low-carbon economies in Asean+3” focusing on the issue “how Asia should promote sustainable Finance.” The panel discussed activities that are being undertaken by the Asean Capital Market Forum (ACMF) to develop and promote sustainable and transition finance, and the benefits of a regional taxonomy to an Asean country like the Philippines, among others. Joining me were distinguished panelists in the field of sustainable finance: Eugene Wong, chief executive officer of Sustainable Finance Institute Asia; F. Cleo Kawawaki, head of the Office of Public-Private Partnership of the ADB; Shinji Ayuha, senior stewardship officer and deputy general manager of Sumimoto Mitsui Trust Asset Management Inc.; and Pin Hsuan Wu, financial sector specialist of the ADB.
During the panel discussion, I pointed out that the Asean Taxonomy serves as a common language and overarching guide for AMS that can be used to identify and classify activities while taking into account Asean’s needs as well as international goals and standards.
I also shared, in relation to the discussion on ESG disclosure requirements, that while not all AMS have introduced incentives for companies and investors to encourage ESG disclosure, exploring incentives is part of the ACMF roadmap. Providing incentives, however, may differ for each AMS depending on the authority of the securities regulator. For instance, in the Philippines, the SEC does not have the authority to grant tax incentives as a securities regulator.
I further shared that bridging the gap between companies and investors vis-a-vis ESG disclosure requirements may also be done through capacity-building programs such as the SEC Campaign and SEC Roadshows which are educational campaign programs focused at bridging the information gap between companies and investors in the absence of ESG standards and during the transition toward ESG standards and disclosures. On the regional level, the ACMF developed the Sustainable Finance Knowledge Hub accessible through the ACMF’s website, which is intended to increase public awareness on Asean sustainable products.
On the discussion regarding the recent launch of the ISSB standards, I emphasized the importance of conducting analysis and assessment studies to find out if the transition and costs to adopting the standards in the Philippines will, in fact, reduce the efforts and costs of the current voluntary and multiple approaches while weighing in the benefits it may have for companies to be able to conclude on whether or when to adopt the ISSB standards in the Philippine financial landscape.
The meeting was held aimed at strengthening engagement and collaboration on sustainable finance between the AMS and the +3 which became a good opportunity for exchanging ideas and experiences on sustainable and transition finance among peers and exploring potential collaborations with their respective countries.
The SEC continues to foster dialogue with international counterparts and is dedicated to the global movement toward a more sustainable and responsible business landscape.
Kelvin Lester K. Lee is a commissioner of the Securities and Exchange Commission (SEC). The views and opinions stated herein are his own. You may email your comments and questions to [email protected].