Three guidelines on ESG have been issued in the APAC region with the intent to drive the transition to a green economy through integrating environmental risk considerations in investment decisions. Although these three publications can seem like different requirements, they are very similar with a similar path to implementation which we explore in this article.
During June 2017, the Task Force on Climate-related Financial Disclosures (TCFD) published recommendations on climate-related financial disclosures that are applicable to organisations across sectors and jurisdictions.
Importantly, the Task Force’s recommendations apply to financial-sector organisations, including banks, insurance companies, investment managers, and asset owners.
On 8 December 2020, the Monetary Authority of Singapore (“MAS”) issued Guidelines on Environmental Risk Management aimed at investment managers. On 20 August 2021, the Hong Kong Securities and Futures Commission (“SFC”) issued a circular on the Management and disclosure of climate-related risks by investment managers.
These guidelines are intended to drive the transition to a green economy through integrating environmental risk considerations in investment decisions. Although these three publications can seem like different requirements, they are very similar with a similar path to implementation which we explain below:
There are four or five key areas for investment managers to look into for their compliance with the guidelines:
There are a lot to consider during each step and the results will differ for each investment manager and each fund, but below is the standard process and recommended steps to follow for implementation:
Watch our latest webcast in partnership with Ogier where we discuss the practical experiences in advising and supporting asset managers in their journeys to meet these sustainability standards.