Recognising the threat of climate change and the importance of sustainable development, Singapore has made a commitment to establishing a robust framework of environmental and climate change laws and regulations – an unprecedented initiative in the Southeast Asia region.

Singapore launched its key environmental strategy in 2021 with the Singapore Green Plan 2030, a

The Monetary Authority of Singapore (MAS) launched the Singapore-Asia Taxonomy for Sustainable Finance (the “Singapore-Asia Taxonomy”) at the COP28 climate conference on 3 December 2023. This development is noteworthy as the Singapore-Asia Taxonomy is the world’s first multi-sector transition taxonomy for defining green and transition activities across eight key sectors, namely: (1) energy; (2) industrial; (3) carbon capture and sequestration; (4) agriculture and forestry; (5) construction and real estate; (6) waste and circular economy; (7) information and communications technology; and (8) transportation. The Singapore-Asia Taxonomy uses the traffic lights system of “green” (environmentally sustainable), “amber” (transition) and “ineligible” to classify activities based on their contribution to the taxonomy’s environmental objectives, currently focused on climate change mitigation. We previously reported on the work leading up to the finalisation of the Singapore-Asia Taxonomy here and here.Continue Reading Singapore Launches World’s First Multi-Sector Transition Taxonomy

Plastic pollution is a global environmental problem. To combat this issue, the United Nations Environment Assembly passed a resolution in March 2022 to develop a draft global agreement on plastic pollution by the end of 2024 (reported here). The third session of the Intergovernmental Negotiating Committee recently concluded in Nairobi, Kenya with the next session scheduled in April 2024 in Ottawa, Canada. Further, in April 2023, the international non-profit organisation, CDP, added plastic-related impacts to its global disclosure platform for companies and governments (reported here).

In Hong Kong, waste plastics continue to make up around 20% of municipal household solid waste disposal. To address growing concerns over the harmful effects of plastic waste on the environment and public health, the Hong Kong government recently passed the Product Eco-responsibility (Amendment) Bill 2023 (the “Bill“) to introduce regulations on disposable plastic tableware and other common plastic products, some of which will be banned from sale or free distribution in the coming year. Consequently, businesses in the food and beverage and hospitality industries will have to adapt their business operations. Hong Kong residents and visitors must also modify their consumption habits accordingly.Continue Reading Hong Kong Promotes Product Eco-Responsibility: New Regulations on Disposable Plastic Products

Our international ESG team has been keeping an eye on what’s going on with regards to green taxonomies. With so much activity already this year, we summarize some of the key developments below.

EU

We recently published this reminder of the EU’s taxonomy framework. Our publication is particularly relevant to non-EU groups with large subsidiaries

On 27 July 2023, the International Sustainability Standards Board (the “ISSB”) published the Proposed IFRS Sustainability Disclosure Taxonomy for public consultation. The IFRS Sustainability Disclosure Taxonomy, which follows the ISSB’s issuance of the IFRS sustainability disclosure standards (the “Standards”) (which we reported here), is a digital taxonomy designed to facilitate digital reporting of sustainability-related financial information and to improve accessibility and comparability of such information by investors and regulators globally. Notably, the IFRS Sustainability Disclosure Taxonomy is not a taxonomy for categorising sustainability ratings or attributes of specific activities such as the EU taxonomy for sustainable activities.Continue Reading ISSB Publishes IFRS Sustainability Disclosure Taxonomy for Consultation

On 30 June 2023, the Working Group on Impact Investment (“Working Group”), which was established under the Expert Panel on Sustainable Finance of the Financial Services Agency of Japan (“FSA”), published a report (“Report”) (in English and Japanese) setting out domestic and international trends in impact investment and draft basic guidelines consisting of four key principles as discussed below (“Guidelines”).  The Report seeks to fill a gap in the lack of standards regulating “impact investment”, one of several sustainable finance investment methods, and noted “impact investment” market practices are still developing. In contrast, other ESG investment methods such as “integration” and “positive or negative screening” appear to be more commonly used in the market.

The Guidelines seek to encourage dialogue and align understanding on basic concepts and processes for “impact investment” between investors, financial institutions and companies in Japan and globally, and develop knowledge and experience in this area. The Guidelines further aim to create an environment in which investors and financial institutions can invest more confidently without concerns of greenwashing, and to help companies in obtaining financing and support. Continue Reading Japan FSA Publishes Draft Guidelines on Impact Investment and Calls for Public Opinion

The inaugural International Sustainability Standards Board (“ISSB“) sustainability disclosure standards, namely IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) (the “ISSB Standards“), have received positive feedback from stakeholders across the globe since its issuance on 26 June 2023 (which we reported here). This includes endorsement by the International Organization of Securities Commissions (IOSCO) on 25 July 2023.

The long-awaited ISSB Standards are intended to serve as a global baseline for transparent, reliable and comparable corporate disclosure of climate and sustainability-related information, and will help to inform investment decisions. In this blog post, we summarise several Asian regulators’ responses to the ISSB Standards which have been positive.  Continue Reading Asia Regulators’ Responses to the ISSB Disclosure Standards

Businesses, especially micro, small and medium-sized enterprises (MSMEs), continue to face practical challenges in ESG reporting due to costs, the lack of resources and expertise on sustainability reporting, and the complexities around multiple standards and reporting frameworks in use globally.

On 22 June 2023, the Monetary Authority of Singapore (MAS), United Nations Development Programme (UNDP) and the Global Legal Entity Identifier Foundation (GLEIF) announced an initiative to develop digital ESG credentials for MSMEs worldwide to facilitate ESG reporting for this sector. The initiative, named Project Savannah, will produce a multi-jurisdictional proof of concept targeted for launch at the upcoming COP28.Continue Reading Digital ESG credentials for micro, small and medium-sized enterprises globally – from Singapore to the world