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ESG News | June 2024 Roundup

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Welcome to our new Monthly ESG News blog. Keeping abreast of the latest developments in ESG today is crucial for business owners and compliance staff who aim to stay ahead in sustainability compliance.

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Here we report on some of the significant local and global ESG news that emerged during June, encompassing critical updates in ESG data and sustainability reporting.

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Understanding these changes can help you navigate the evolving landscape of ESG and sustainability, ensuring your business remains compliant and competitive.

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Local and Global Regulatory Updates

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June saw a host of major regulatory updates impacting ESG and sustainability reporting standards.

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Locally, Capital Markets Malaysia launched sector-specific guidelines for its Simplified ESG Disclosure Guide (SEDG). The new guidelines target five critical sectors: energy, transport and logistics, construction and real estate, agriculture, and manufacturing. Read our in-depth look at these changes to see how they impact your company.

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Elsewhere, the European Union implemented its updated Corporate Sustainability Reporting Directive (CSRD). This directive mandates more comprehensive ESG data reporting from large companies and listed SMEs, emphasising transparent sustainability reporting.

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The US Securities and Exchange Commission (SEC) proposed and approved new rules requiring public companies to disclose climate-related risks and their impacts on business operations in April 2024. However, these changes, which reflect a broader global push towards rigorous ESG compliance, have been delayed due to court challenges.

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Malaysia's Sunway Group and The EU Partnership

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On June 24, The Sunway Group and the European Union (EU) signed a partnership deal to advance sustainability initiatives in Malaysia, focusing on sustainable development, education, and climate action. This collaboration is part of the EU's commitment to global partnerships for sustainability, including efforts such as promoting green technologies and practices. 

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The initiative also aims to support Malaysia's transition towards a low-carbon economy by providing knowledge transfer and fostering innovative solutions in environmental conservation.

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The partnership will leverage Sunway Group's extensive experience in sustainable development and the EU's expertise in environmental policies to create impactful programs. Key focus areas include enhancing sustainable urban development, increasing renewable energy adoption, and encouraging sustainable consumption practices. 

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The goal is that this collaboration will bring significant benefits to Malaysia's sustainability landscape, aligning with global efforts to combat climate change and promote sustainable growth.

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GRI Labour Standards Update

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For instance, the Global Reporting Initiative (GRI) updated its labour-related standards to improve corporate transparency on worker impacts. The new standards focus on employment factors, remuneration, working time, and significant changes for workers. They were developed with input from various stakeholders, including the International Trade Union Confederation and the International Labour Organisation, to ensure alignment with global human and labour rights instruments. 

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These updates aim to enhance corporate accountability and are particularly relevant for asset managers and investors who prioritise social responsibility in their investment strategies.

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Future consultations will address working life, career development, and workers' rights over the next year, further refining 11 GRI standards. These updates are crucial for fostering sustainable and responsible business practices. GSSB Chair Carol Adams emphasised the importance of improved labour-related disclosures for achieving Sustainable Development Goals (SDGs) and encouraged stakeholder feedback. 

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The revisions aim to support companies in protecting human and labour rights, ultimately aiding policymakers, regulators, and stakeholders in promoting corporate transparency and accountability.

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Sustainability Reporting

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June also brought notable advances in sustainability reporting; for example, the International Sustainability Standards Board (ISSB) introduced new guidelines to standardise sustainability reporting across industries. These guidelines emphasise the importance of consistent and comparable data, enabling investors to make more informed decisions.

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Adopting these advanced reporting methods can significantly enhance SMEs' ESG credibility and attract potential investors. As regulatory pressures mount and stakeholder expectations evolve, staying ahead with innovative sustainability reporting practices is crucial for maintaining a competitive edge and demonstrating a genuine commitment to sustainability.

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Also in June, The International Finance Corporation (IFC) and the IFRS Foundation partnered to enhance sustainability and climate reporting in emerging markets and developing economies (EMDEs). Announced during London's Climate Action Week, this collaboration aims to standardise and improve regional transparency. The partnership will implement programs to promote the consistent application of IFRS Sustainability Disclosure Standards, develop toolkits, conduct training, and provide technical assistance. This initiative builds on IFC's successful projects, aiming to future-proof financial markets against environmental risks and promote sustainable business models.

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Jingdong Hua, Vice-Chair of the ISSB, emphasised the importance of this partnership in bringing reliable sustainability information to global markets, particularly benefiting EMDEs. The collaboration leverages the IFRS Foundation's standards and the IFC's market insights to support private sector resilience and transparency. 

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This effort aligns with existing initiatives like IFC's Beyond the Balance Sheet program and the SBFN, aiming to foster sustainable finance and high-quality environmental reporting. The partnership underscores a commitment to driving significant strides in global sustainability and climate reporting standards.

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Green Finance

Hong Kong's sustainable debt market surged to $18.2 billion in 2023, making it the fifth-largest globally. This growth, marked by a 236% increase, was driven primarily by government-issued green bonds, which comprised 92% of the volume. The Hong Kong Special Administrative Region (HKSAR) Government plans to issue $12.2-$17.3 billion in bonds annually through 2028, aligning with its climate goals of halving emissions by 2035 and achieving net zero by 2050. This expansion underscores Hong Kong's strategic role in global decarbonisation efforts.

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In collaboration with the Hong Kong Monetary Authority (HKMA) and the Hong Kong Green Finance Association (HKGFA), the Climate Bonds Initiative highlighted Hong Kong's emergence as a leading green bond issuer in Asia. The market's impressive growth reflects significant government support and strategic initiatives aimed at connecting global capital to green investments in China. The focus on sustainable finance and transition activities should help mitigate greenwashing and enhance Hong Kong's position as a hub for international sustainable financing.

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Meanwhile, the Principles for Responsible Investment (PRI), the United Nations Environment Programme Finance Initiative (UNEP FI), and the Climate Bonds Initiative have announced a collaboration to enhance global sustainable finance taxonomies. This partnership aims to harmonise definitions and concepts, supporting the development and implementation of taxonomies to facilitate sustainable investments.

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Their combined efforts will provide tools and resources for better taxonomy usability and interoperability, which are crucial for directing capital towards sustainable projects and ensuring consistency in sustainable finance practices globally.

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This initiative will also create a taxonomy resource centre to support developers and users, integrating taxonomies within broader regulatory frameworks. The collaboration emphasises the importance of a unified approach to sustainable finance, helping to scale up private finance for sustainable development. This partnership seeks to strengthen transparency and coherence in sustainable investment by improving taxonomy frameworks, benefitting investors, policymakers, and other stakeholders committed to environmental goals.

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Upcoming ESG/Sustainability Events

Malaysia:

Transform Your Business for a Sustainable Future

August 13 1-5 pm

ELM Graduate School, Jalan Semantan Kuala Lumpur, Federal Territory of Kuala Lumpur 50490

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Renewable Energy & ESG Conference 2024

September 9 & September 10  

Sime Darby Convention Centre, 1A Jalan Bukit Kiara 1 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur 60000

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Online/Global:

GRI-ESRS Linkage Service: making transition easier for GRI reporters

July 25 (2 sessions: 3:30 pm or 11 pm)

Online

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3rd Annual Global ESG and Sustainability Summit

September 19 & 20

Pullman, 19 Rue Du Commandant René Mouchotte, Paris, France

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Certified Sustainability ESG Practitioner Program, Leadership Edition 2024, with Live Zoom Sessions

September 27 10:00 am EDT & October 1 @ 1:30 pm EDT

Online

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Related Blog Posts:

ESG News  | July 2024 Roundup

From Carbon Footprints to Governance: Understanding ESG Reporting Terminology

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