Ambrose Milayi’s Post

Each week, we collect some of the top #ESG and #climate stories to keep you updated and informed on the latest developments in #sustainablefinance. Here are some of the #headlines that have caught our eye this week: ✳ #ISSB Publishes Sustainability Disclosure Taxonomy – Regulation Asia https://lnkd.in/gAhYnshw ✳ EU Approves 2 Year Delay to Sustainability Reporting Standards for Specific Sectors and non-EU Companies – ESG Today https://lnkd.in/gmJZQQSe ✳ Q1 Sustainable Fund Flows Recover Amid US ESG Backlash - Citywire https://lnkd.in/em6jnc8s ✳ UK’s New Climate Action Plan Unlawful, London’s High Court Rules – Reuters https://lnkd.in/eUCURsGD ✳ Twenty Airlines Told to Amend Sustainability Claims in EU ‘Greenwashing’ Crackdown – FlightGlobal https://lnkd.in/e_W_QZDC #NewsReview #WeekInESG #ClimateNews

This week, the European Securities and Markets Authority (ESMA) published an Opinion on their review of the Sustainable Finance Regulatory Framework (SFDR). Some of the key recommendations made by the regulator are: 💹 ALL financial products (even those that "have no stated sustainability ambitions") should disclose basic sustainability information; meaning ALL financial products will have to disclose environmental (e.g., GHG emissions, impact on biodiversity) and social indicators (e.g., human rights, labour rights). 👏 ♻ The EU Taxonomy should become the sole, common reference point for the assessment of sustainability and should be embedded in relevant sustainable finance legislation and should be completed, including with a social taxonomy; ⏭ Expanding and standardising disclosure requirements to cover transition-related investments, to and developing a wider, more ambitious set of benchmarks. 📊 Bringing ESG data products into the regulatory scope, and improving the consistency, standardisation, and machine-readability of sustainability reporting. Vested Impact welcomes the ESMA’s Opinion and we look forward to working with our partners to bring scalable, comparable and science-based data to support robustness, transparency and consistency across the industry. Jake Mulcahy Jane Michotte #SustainableFinance #ESMA #EUTaxonomy #SFDR  #TransitionInvestments #ESG #SustainabilityDisclosure #Greenwashing #ImpactInvesting https://lnkd.in/dMGTwFDR

I watched a great FT documentary recently on whether the "ESG Party" was over? The answer was a resounding no, rather it was now being simply viewed as a core part of doing business and good risk management to understand your environmental and social impacts - not something seperate on the side. And the publication by the EU regulators (ESMA) this week shows just that. One of the major recommendations from their request by the EU Commission to provide an opinion and review on the Sustainable Finance Regulatory Framework is that ALL financial products should have to report, not just carbon emissions, but biodiversity, human rights and broader social impacts. This is big. And follows on from the EU Parliaments approval of the CSRD regulation that requires all companies in the EU to have to disclose their material impacts. Both of these state that it is simply just good consumer protection and risk management to have to be clear, transparent and comparable disclosure of the risks and impacts of business products, services and activities - no matter if your business or financial product is claiming to be "sustainable" or not. Couldn't agree more - thats why at Vested Impact we assess the impact of over 2M SME's, 25,000 listed companies, and thousands of Bond disbursements. We need to understand the WHOLE picture if we are going to solve the worlds challenges. And good risk management will always be here to stay. #impactassessment #materialimpacts #csrd #csddd #sfdr #sdgs

The Stock Exchange of Hong Kong announced that all listed companies will be required to begin providing mandatory climate-related disclosures based on the IFRS Foundation’s International Sustainability Standards Board (ISSB) new reporting standards, with Scope 1 and 2 emissions disclosure beginning as of the 2025 reporting year. The announcement follows the launch by the exchange last year of a consultation proposing new climate-related disclosures for companies. The exchange reported that it “received broad-based support for its proposals,” leading to the decision to adopt the consultation proposals. The IFRS released the inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards in June 2023, and in July, IOSCO, the leading international policy forum and standards setter for securities regulators called on regulators to incorporate the standards into their sustainability reporting regulatory frameworks. The decision also follows the release last month by the Hong Kong government of a statement setting out its approach towards the development of a comprehensive ecosystem for sustainability disclosure, including working with regulators and stakeholders to develop a roadmap on the appropriate adoption of the ISSB standards, and to develop local sustainability reporting standards aligned with the ISSB. Katherine Ng, Head of Listing at Hong Kong Exchanges and Clearing Limited (HKEX), said:  “The New Climate Requirements form part of the wider Hong Kong roadmap for the local adoption of the ISSB Standards. This will be an important part of our ongoing efforts to prepare listed companies towards eventual sustainability reporting in accordance with the local sustainability disclosure standards under development, enhancing Hong Kong’s capital markets attractiveness and competitiveness.” Under the new rules, all issuers on the exchange will be required to begin Scope 1 and 2 GHG emissions disclosures for reporting periods beginning from January 1, 2025. LargeCap issuers – those included in the Hang Seng Composite LargeCap Index, which account for 80% of the HSCI composite’s market capitalization – and other Main Board issuers will also be required to provide other disclosures, including reporting on Scope 3 value chain emissions on a comply-or explain basis starting in 2025, with LargeCap issuers to be required to provide these disclosures on a mandatory basis the following year. Small and mid-size “GEM” issuers will be able to provide disclosure other than Scope 1 and 2 emissions on a voluntary basis. Ng said: “With a strong market mandate, we at HKEX are pleased to be among the world’s first exchanges to enhance the climate-related disclosure requirements based on IFRS S2. We are also adopting a phased approach and implementation reliefs to support listed companies to meet the new requirements without undue burden and within a reasonable timeframe.” The Stock Exchange of Hong Ko

The Stock Exchange of Hong Kong announced that all listed companies will be required to begin providing mandatory climate-related disclosures based on the IFRS Foundation’s International Sustainability Standards Board (ISSB) new reporting standards, with Scope 1 and 2 emissions disclosure beginning as of the 2025 reporting year. The announcement follows the launch by the exchange last year of a consultation proposing new climate-related disclosures for companies. The exchange reported that it “received broad-based support for its proposals,” leading to the decision to adopt the consultation proposals. The IFRS released the inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards in June 2023, and in July, IOSCO, the leading international policy forum and standards setter for securities regulators called on regulators to incorporate the standards into their sustainability reporting regulatory frameworks. The decision also follows the release last month by the Hong Kong government of a statement setting out its approach towards the development of a comprehensive ecosystem for sustainability disclosure, including working with regulators and stakeholders to develop a roadmap on the appropriate adoption of the ISSB standards, and to develop local sustainability reporting standards aligned with the ISSB. Katherine Ng, Head of Listing at Hong Kong Exchanges and Clearing Limited (HKEX), said:  “The New Climate Requirements form part of the wider Hong Kong roadmap for the local adoption of the ISSB Standards. This will be an important part of our ongoing efforts to prepare listed companies towards eventual sustainability reporting in accordance with the local sustainability disclosure standards under development, enhancing Hong Kong’s capital markets attractiveness and competitiveness.” Under the new rules, all issuers on the exchange will be required to begin Scope 1 and 2 GHG emissions disclosures for reporting periods beginning from January 1, 2025. LargeCap issuers – those included in the Hang Seng Composite LargeCap Index, which account for 80% of the HSCI composite’s market capitalization – and other Main Board issuers will also be required to provide other disclosures, including reporting on Scope 3 value chain emissions on a comply-or explain basis starting in 2025, with LargeCap issuers to be required to provide these disclosures on a mandatory basis the following year. Small and mid-size “GEM” issuers will be able to provide disclosure other than Scope 1 and 2 emissions on a voluntary basis. Ng said: “With a strong market mandate, we at HKEX are pleased to be among the world’s first exchanges to enhance the climate-related disclosure requirements based on IFRS S2. We are also adopting a phased approach and implementation reliefs to support listed companies to meet the new requirements without undue burden and within a reasonable timeframe.” The Stock Exchange of Hong Ko

Climate Finance Asia colleagues, Mark Hinnells and Winnie Ng, CESGA, CFA, CPA attended an Hong Kong Monetary Authority (HKMA) HKMA briefing session last week on the new HKMA Taxonomy for Sustainable Finance, and have been reflecting on key takeaways: 1. The taxonomy is currently focused on Hong Kong's priorities for decarbonisation, energy generation, buildings, transport and waste. But since HK markets finance emissions some 11x the total emissions from HK, (according to City University of Hong Kong) especially in mainland China, it would make sense to expand the Taxonomy to other sectors and technologies, including decarbonising manufacturing, new forms of making concrete and steel, and decarbonising international aviation and shipping. 2. The Taxonomy is currently voluntary, but there was a hint it may be made part of the banking regulatory framework, though no timescale or route is mapped out. HKMA is a de Facto central bank and ensures the banks incorporate climate risk. So how could this happen? 3. HKMA can require banks report on lending and investment inside and outside the taxonomy, and can work with HKEX to ensure TCFD/IFRS reporting on climate includes reporting on use of the taxonomy. The taxonomy has users beyond banks and their customers. Lenders and investors might include Pensions, Life Insurance, and other funds, as well as family offices, users beyond HKMA's regulatory ambit. How do the regulators act together to incentivise much wider investment using the taxonomy? 4. Take up of the taxonomy would be much greater if there was an incentive. The Government, not HKMA is responsible for tax, so it needs the right conversations.  One option worth exploring is the UK system of Enhanced Capital Allowances (or 100% first year allowances) for certain types of energy saving equipment defined by a list (which is a simple taxonomy), which our colleague Mark Hinnells helped implement. If, for example, investment under the taxonomy was given favourable capital allowances treatment, there would be a cash flow benefit for using the taxonomy.     Notes: - CityU (2024) Estimation of Financed Emissions in Hong Kong and Policy Recommendations Final Report https://lnkd.in/gV-e67Gh - Although the original UK Energy Technology List for Enhanced Capital Allowances has closed, (see https://lnkd.in/gfwZv7_C) there is now a simplified list of technologies eligible for 100% first year allowances, see https://lnkd.in/etBBftx4 #sustainablefinance #HKMA #taxonomy #climatechange #climatecrisis #HKSAR

Hong Kong Exchange to require IFRS-based climate disclosure beginning 2025 On April 19, the Hong Kong Exchanges and Clearing Limited (HKEX) announced the adoption of climate-related disclosures under its environmental, social, and governance framework. Mandatory disclosures The new regulations will require the disclosure of Scope 1 and Scope 2 greenhouse gas emissions starting January 1, 2025. These will be mandatory climate-related disclosure requirements for all listed companies, based on the International Sustainability Standards Board (ISSB) new reporting standards, with Scope 1 and 2 emissions disclosure starting from the 2025 reporting year. There has been a global push to expand the financial reporting requirements of corporations from traditional financial data, to include sustainability and other ESG issues. Read more: https://lnkd.in/d8UbzdYV #HongKongExchange #HongKongDisclosures #HongKongPolicy #HongKongIFRSDisclosures

Britain is gearing up to rate the raters -- so to speak. The country's finance ministry announced plans to regulate providers of ESG ratings, with the aim of boosting "clarity and trust" in how ESG ratings are calculated. It has promised to take legislative action later this year. The move aims to address the unregulated nature of the sector, where trillions of dollars are invested globally based on ESG ratings. However, unlike the EU's recent mandatory rules for ESG ratings, Britain is sticking with a "voluntary" approach, at least for now. Will this be enough? #esg #ratings #regulation

The IFRS Foundation’s International Sustainability Standards Board (ISSB) was launched in November 2021 at the COP26 climate conference, with the goal to develop IFRS Sustainability Disclosure Standards to provide investors with information about companies’ sustainability risks and opportunities. The IFRS released the inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards in June 2023. #GreenStandards https://lnkd.in/gbWanwEn

The Stock Exchange of Hong Kong announced that all listed companies will be required to begin providing mandatory climate-related disclosures based on the IFRS Foundation’s International Sustainability Standards Board (ISSB) new reporting standards, with Scope 1 and 2 emissions disclosure beginning as of the 2025 reporting year. The announcement follows the launch by the exchange last year of a consultation proposing new climate-related disclosures for companies. The exchange reported that it “received broad-based support for its proposals,” leading to the decision to adopt the consultation proposals. The IFRS released the inaugural general sustainability (IFRS S1) and climate (IFRS S2) reporting standards in June 2023, and in July, IOSCO, the leading international policy forum and standards setter for securities regulators called on regulators to incorporate the standards into their sustainability reporting regulatory frameworks. The decision also follows the release last month by the Hong Kong government of a statement setting out its approach towards the development of a comprehensive ecosystem for sustainability disclosure, including working with regulators and stakeholders to develop a roadmap on the appropriate adoption of the ISSB standards, and to develop local sustainability reporting standards aligned with the ISSB. Katherine Ng, Head of Listing at Hong Kong Exchanges and Clearing Limited (HKEX), said:  “The New Climate Requirements form part of the wider Hong Kong roadmap for the local adoption of the ISSB Standards. This will be an important part of our ongoing efforts to prepare listed companies towards eventual sustainability reporting in accordance with the local sustainability disclosure standards under development, enhancing Hong Kong’s capital markets attractiveness and competitiveness.” Under the new rules, all issuers on the exchange will be required to begin Scope 1 and 2 GHG emissions disclosures for reporting periods beginning from January 1, 2025. LargeCap issuers – those included in the Hang Seng Composite LargeCap Index, which account for 80% of the HSCI composite’s market capitalization – and other Main Board issuers will also be required to provide other disclosures, including reporting on Scope 3 value chain emissions on a comply-or explain basis starting in 2025, with LargeCap issuers to be required to provide these disclosures on a mandatory basis the following year. Small and mid-size “GEM” issuers will be able to provide disclosure other than Scope 1 and 2 emissions on a voluntary basis. Ng said: “With a strong market mandate, we at HKEX are pleased to be among the world’s first exchanges to enhance the climate-related disclosure requirements based on IFRS S2. We are also adopting a phased approach and implementation reliefs to support listed companies to meet the new requirements without undue burden and within a reasonable timeframe.” The Stock Exchange of Hong Ko