Bursa – ASEAN Integrated Sustainable Network

The Association of South-East Asian Nations (ASEAN) region is on the verge of a massive transition, indicated by the establishment of the ASEAN-Interconnected Sustainability Ecosystem (ASEAN-ISE). As part of this initiative, the Bursa Malaysia Berhad (Bursa Malaysia), the Indonesia Stock Exchange (IDX), the Stock Exchange of Thailand (SET), and the Singapore Exchange (SGX Group) have joined hands to improve sustainable development. 

The boost in sustainable development for the ASEAN region will be brought about through the adoption of Environmental, Social, and Governance (ESG) metrics in their data infrastructures. As early participants, Bursa Malaysia, IDX, and SET collaborated to enhance regional cooperation and sustainability in ASEAN. 

Datuk Mohamad Umar Swift, CEO of Bursa Malaysia, said, “Through this partnership, we aim to enhance cross-border cooperation and seize opportunities to harmonise ESG measures and ESG infrastructure that promotes sustainable business practices in ASEAN.”

Regarding the inclusion of SGX Group, he said, “This most recent development aligns with our intent to broaden participation from exchanges in the ASEAN region and beyond. Together, we envisage an open and inclusive ecosystem in which Participating Exchanges in ASEAN operate a trusted and fundamentally aligned data infrastructure.”

The ASEAN-ISE programme was formalised during a meeting with the Partner Exchanges. An agreement was reached on the governance framework and operational plan for establishing the interconnected sustainability ecosystem. 

Objectives of ASEAN-ISE 

Led by Bursa Malaysia as the ASEAN-ISE Secretariat, this effort intends to achieve the following outcomes: 

  1. Creating an integrated ESG framework to promote sustainable development throughout ASEAN.
  2. By leveraging economies of scale with tailored solutions, Participating Exchanges can improve their cost efficiency and accelerate market entry.
  3. Enabling Participating Exchanges to actively assist ESG-compliant companies in increasing their business value through high-quality disclosures. It involves:
    1. Developing infrastructure solutions to facilitate cross-border commerce
    2. Connecting corporate supply chains with ESG-focused investment funds
    3. Allowing suppliers with excellent ESG practices and disclosures to access better financing conditions

In the implementation process of ASEAN-ISE, the Participating Exchanges have agreed to specific, results-oriented collaboration goals. They take into account each member’s particular local contexts and market development stages. An essential commitment is to adopt and implement the “ASEAN Exchanges Common ESG Metrics” in their individual ESG reporting systems. 

The Participating Exchanges will meet again to finalise implementation details. The goal is to officially establish the ISE Governance Framework and Operating Structure during the 37th ASEAN Exchanges CEOs Meeting in Malaysia in July 2024.

Bottom Line 

The ASEAN-ISE initiative is a significant move towards incorporating sustainable development and ESG practices into ASEAN financial markets. By implementing standard ESG metrics and encouraging outcome-oriented collaboration, the Participating Exchanges are establishing the framework for a more sustainable, efficient, and interconnected regional marketplace. 

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