Most will remember 2020 for the chaos of the coronavirus outbreak but it was also a memorable year in the ESG sphere. 2020 was game changing with China’s net zero pledge by 2060 and President Biden’s commitment for the United States of America to rejoin the Paris Agreement, cementing renewed climate goals for the world’s two largest economies.
For countries that have set carbon neutrality goals, there is evident acceleration in regulatory requirements on disclosure, close to standards required by the Task Force on Climate-related Financial Disclosures (TCFD). Within Asia Pacific, Hong Kong Stock Exchange is making public company disclosures on climate change and social issues mandatory from 2021, whilst the Monetary Authority of Singapore (MAS) also published “Guidelines on Environmental Risk Management for Asset Managers”, with implementation by June 2022. Countries like Japan and Australia are already amongst the top five TCFD Supporters globally. The International Financial Reporting Standards Foundation’s formation of a working group to focus on harmonizing global sustainability standards suggests further convergence of ESG reporting standards is likely in the near future.
[1] Task Force on Climate-related Financial Disclosures, 2020 Status Report
