MTCC NEWS 2/21

By Mr. Jason JS Lee
| MEMBER’S CORNER Continued from page 27
reporting provision developments. These developments
include a shift towards mandatory reporting, as
reported by the 2020 edition of Carrots & Sticks that
assesses the regulatory landscape of non-financial
and sustainability reporting. In the Asia Pacific region,
there are now 75 voluntary provisions and 99 mandatory
provisions. This is way ahead of North America
with only 16 voluntary provisions and 31 mandatory
provisions. By 2020, there was a strong surge of
“comply or explain” provisions in Asia.
The majority of reporting provisions target specifically
large and listed companies, whereby many stock
exchanges in the region have established and published
ESG reporting guidelines. Most exchanges in
Asia are now members of the Sustainable Stock
Exchanges (SSE) initiative.
The SSE initiative is a United Nations partnership
programme to provide “a global platform for exploring
how exchanges, in collaboration with investors, companies
(issuers), regulators, policymakers and relevant
international organizations, can enhance performance
on ESG issues and encourage sustainable
investment, including the financing of the UN Sustainable
Development Goals.”
Here are Asian stock exchanges participating in the
SSE initiative, that have both ESG reporting requirements
as a listing rule, and written guidance on ESG
reporting:
1.China: Hong Kong Exchanges and Clearing Limited
• Issuers must publish their ESG reports on an annual
basis and regarding the same period covered in their
annual reports. Reporting requirements can be found
in the related Main Board Listing Rules and the ESG
Reporting Guide, Appendix 27 to the Main Board
Listing Rules.
• Effective on 1 July 2020, the changes to the ESG
Reporting Guide focus on the board’s leadership role
and accountability in ESG and the governance structure
for ESG matters.
• The revised ESG Reporting Guide comprises two
levels of disclosure obligations: (a) mandatory disclosure
requirements; and (b) “comply or explain” provisions.
Issuers must disclose the information required
under the “Mandatory Disclosure Requirements”; and
if the issuer does not report on one or more of the -
“comply or explain” provisions, it must provide considered
reasons in its ESG report.
2. India: Bombay Stock Exchange
• BSE signed Memorandum of Understanding with
GRI for creating awareness amongst companies and
investors regarding ESG Disclosures
•BSE–Carbon Disclosure Project (CDP) initiative.
BSE signed Memorandum of Understanding with
CDP India to jointly carry out activities for creating
awareness about filing sustainability/ESG data with
CDP. CDP India is actively in touch with Top 200
(BSE-200 constituents) companies to encourage
them to report non-financial data. The data received
from CDP will be used for the calculations of S&P
BSE Carbonex.
3. Indonesia: Indonesia Stock Exchange
• Sustainability reporting is required under Indonesia
Financial Services Authority (Otoritas Jasa Keuangan)
rule number 51/POJK.03/2017: Implementation
of Sustainability Finance for Financial Services Institutions,
Issuers and Public Companies.
• All listed companies are required to publish Sustainability
Reporting starting from:
o Banking Corporations (from 2019)
o Listed Companies (from 2020)
4. Malaysia: Bursa Malaysia
• In October 2015, Bursa Malaysia issued amendments
to the Main Market Listing Requirements
(“Main LR”) and ACE Market Listing Requirements
(“ACE LR”) (collectively referred to as the “LR”) relating
to sustainability statements in annual reports
(“Sustainability Amendments”).
• Under the Sustainability Amendments, listed issuers
are required to disclose a narrative statement of the
management of material economic, environmental
and social (“EES”) risks and opportunities (“Sustainability
Statement”) in their annual reports. This
replaces the existing statement on the corporate
social responsibility (“CSR”) activities or practices
required to be disclosed by listed issuers. For the
Main Market listed issuers, they are also required to
include in their Sustainability Statement, the
prescribed information as set out in Practice Note 9 of
the Main LR such as the governance structure, the
scope of the Sustainability Statement and the management
of material EES risks and opportunities
(“material sustainability matters”). The prescribed
disclosure is not applicable to ACE Market listed
corporations given the type and size of the listed
corporations.
•In addition to the above, the LR also encourages all
listed issuers to refer to the Sustainability Reporting
Guide as a best practice when preparing the Sustainability
Statement and in identifying material sustainability
matters.
Continued page 29 28 MTCC NEWS July 2021