ACMF International Conference underpins importance of sustainable finance

LAST October 28, the Asean Capital Markets Forum (ACMF) International Conference, which was jointly organized by the ACMF, the Securities and Exchange Regulator of Cambodia (SERC), and Asian Development Bank, was held in Phnom Penh, Cambodia.

The ACMF, a high-level grouping of capital market regulators from all 10 Asean jurisdictions, has played very active roles in promoting sustainable finance in the region. Through the issuance of the Asean Green, Social and Sustainability Bond Standards, the prioritization of sustainable finance as evidenced by the ACMF Roadmap for Asean Sustainable Capital Markets and the ACMF Action Plan 2021-2025, and the release of the Asean Taxonomy Version 1 in November 2021, the ACMF has shown Asean’s commitment to support the Paris Agreement and United Nations Sustainable Development Goals (SDGs).

Indeed, sustainable finance is a priority of the ACMF. In line with this, the theme of this year’s conference was “The ACMF: The Journey of the Sustainable Development, Inclusivity and Resilience.” The conference aimed to attract more issuers and investors to the Asean capital market through sharing the journey and initiatives of Asean in promoting sustainable finance and asset classes, and sharing what has been done to promote inclusivity and resilience.

As mentioned in last week’s column, the ACMF chairs endorsed the Asean Sustainability-Linked Bond Standards (SLBS) and Asean Sustainable and Responsible Fund Standards (SRFS) during the ACMF Chairs’ meeting. Following this endorsement, separate panel discussions were also held to provide the audience with an in-depth understanding of these new standards. In this regard, the SERC, which co-hosted the event this year, invited speakers from both the ACMF and the private sector to talk about the benefits, challenges and opportunities.

It was a privilege to be a panelist to discuss “Asean Sustainability-Linked Bond Standards: Supporting Transitions for Sustainable Development” alongside representatives from the commission’s regional counterparts. The panel also included representatives from the International Capital Markets Association and Sustainalytics Corporate Solutions.

We have seen that despite the market volatility due to the Covid-19 pandemic and the subsequent global economic downturn, the sustainable finance market has shown rapid growth in the last two years. At the international level, sustainable debt issuance set a record in 2021, surpassing $1.6 trillion. Even in the face of broader market forces, which contributed to a decline in the volume of issuances in the first part of 2022, the total outstanding value of the sustainable finance market continues to rise. We expect the same trend in Asean as seen in the growing number of investors in the region becoming more aware of integrating sustainability in their investments. As such, we anticipate companies to leverage on sustainability-linked finance instruments, such as sustainabilitylinked loans and sustainabilitylinked bonds.

Apart from the launch of the SLBS and SFRS, other panel discussions at the conference focused on:

– The role of the Asean Green Bond Standards and the launch of the first Green Bond issuance from Cambodia;

– Funding the SDGs and the launch of the Country Legal Wrappers for the SDG Bond Toolkit;

– Promoting Sustainable and Responsible Funds with the aim of providing a better understanding of sustainable funds and the benefits of having standards;

– Asean taxonomy, its importance and recent developments on the ongoing work of the Asean Taxonomy

Board;

– Corporate sustainability disclosures, particularly with recent developments in global sustainability reporting standards; and

– The Asean Corporate Governance Scorecard, which aims to encourage confidence in Asean investments and improve corporate governance and reporting.

Finally, in addition to topics on sustainability, the conference highlighted the need to close the infrastructure gap in Asean to further the region’s development and growth. The panel discussion focused on how the capital market can contribute to this goal through channeling investment and finance.

Events such as this recently concluded conference offer a great opportunity for us to engage in dialogue and gain perspectives and insights. There is more to what we can do as individuals and as a collective to ensure that our actions remain meaningful in terms of growth and sustainability of our investors, capital markets and overall economy. I look forward to continuing the dialogue beyond this event.