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Green Finance / Treasury & Capital Markets
Asean launches social and sustainability bond standards
The Asean Capital Markets Forum has launched new standards for the issuance of social and sustainability bonds
The Asset 16 Oct 2018

The Asean Capital Markets Forum (ACMF) has launched two key initiatives to drive a more connected and sustainable Asean capital markets. These initiatives complement the measures introduced by the ACMF on collective investment schemes, corporate governance, disclosure standards and capacity building.

The ACMF continues to place emphasis on sustainable finance and launched the Asean Social Bond Standards (Asean SBS) and the Asean Sustainability Bond Standards (Asean SUS). Their introduction follows from the Asean Green Bond Standards launched in November 2017, thus providing Asean with a complete suite of standards to accelerate the development of sustainable finance in the region.

The standards are intended to enhance transparency, consistency and uniformity of Asean green, social and sustainability bonds, which will reduce due diligence cost and assist global investors to make informed investment decisions.

The Asean SBS were developed based on the Social Bond Principles of the International Capital Market Association (ICMA), while the Asean SUS were developed based on ICMA's Sustainability Bond Guidelines. The proceeds from the social bonds are for financing projects that are socially beneficial, while the proceeds from sustainability bonds will be used to finance a combination of both green and social projects that respectively offer environmental and social benefits.

These two standards complement the Asean Green Bond Standards, which have gained encouraging traction with five issuances from Malaysia and Singapore carrying the Asean green bond label, while the first sovereign sukuk in Asean issued by the Republic of Indonesia is aligned with the Asean Green Bond Standards.

ACMF and the Asian Development Bank (ADB) are working together to promote this asset class to global investors.

In another key initiative, the ACMF launched a framework to facilitate cross-border movement of investment advisers, which will allow Asean investors greater access to professional services. The first phase of the ACMF Professional Mobility Framework is the introduction of the ACMF Pass, which will allow licensed professionals to provide advisory services within the participating Asean jurisdictions with fast-track registration and no additional licensing requirements.

Malaysia, the Philippines, Singapore and Thailand are the first countries to participate in this initiative, with their four regulators signing a memorandum of understanding on October 11 at the 2nd Asean capital market conference, an ACMF initiative hosted by the Monetary Authority of Singapore in collaboration with the ADB. The other countries will be joining the initiative in due course.

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