Magazine issues » April 2020

Legal column: A sustainable evolution

Sustainable_financeIn the Asia-Pacific region, the global push towards sustainable finance has created one of the most dynamic regulatory environments in recent memory. The region’s economic opportunities and challenges have led national regulators to adopt varied and sometimes divergent standards. For the evolution of sustainable finance regulation in 2020, we expect national regulatory frameworks to continue to develop. In the last decade, governments and regulators began putting in place measures such as Indonesia’s Roadmap for Sustainable Finance (2014) and China’s Guidelines on Establishing the Green Financial System (2016). In 2019, Securities Commission Malaysia published its five-year roadmap to become a regional leader in sustainable and responsible investment, while the Hong Kong Monetary Authority announced a long-term, three-phased approach to promote the development of green finance. Certain countries have launched green development funds. By the end of 2016, there were 215 green industry funds registered by provinces and cities in China; and in 2019, Singapore followed suit by establishing a $2 billion green investments programme to place funds with asset managers that have a strong green focus. The Australian Sustainable Finance Initiative is set to publish a national roadmap for the development of sustainable finance regulation. We expect this trend to continue throughout 2020. The US Securities and Exchange Commission is investigating the investment processes of asset management firms with an ESG focus with a view to detecting and preventing greenwashing. Currently, most Asia-Pacific jurisdictions require listed companies to make ESG disclosures predominantly on a voluntary or comply-or-explain basis. We expect to see a move towards mandatory ESG disclosures. The Hong Kong Stock Exchange has announced that it would enhance numerous aspects of its ESG reporting regime beginning in July 2020 and the Hong Kong Securities and Futures Commission (SFC) mandated enhanced disclosure requirements for ESG-focused funds in order to prevent greenwashing. China is also poised to move from a voluntary approach to ESG disclosure to a mandatory regime. As standards and practices around ESG integration develop, we expect regulators to take a view and issue useful best practices guidance for the integration of ESG factors into business operations, including asset management functions. The final quarter of 2019 saw such guidance from regulators in Hong Kong, Vietnam and the Philippines, with the Hong Kong SFC issuing the results of an ESG-focused asset management survey. The State Bank of Vietnam has directed Vietnamese banks to include ESG factors in credit risk analyses and establish dedicated ESG analysis units by 2025, and Bangko Sentral ng Pilipinas announced plans to phase in requirements for banks in the Philippines to integrate ESG factors into corporate and risk governance frameworks, as well as business strategies and operations. Market participants can expect more practical guidance from regulators in 2020. By Mark Uhrynuk, corporate and securities partner; Norah Mugambi, associate and knowledge manager; and Alexander Burdulia, registered foreign lawyer, at Mayer Brown © 2020 funds global asia

Industry comments

Investing in tomorrow’s world

investmentAt times like these, HSBC Asset Management easily pivots towards emerging markets.

The spotlight on growth markets and the need to be nimble and dynamic is ever-sharper, given the difficulty in predicting monetary policy in the world’s major nations.

Sponsored feature: Navigating the complexities of FX execution and currency risk

A comprehensive, cost-effective, and transparent currency overlay hedging solution is crucial to mitigate FX exposure risks in the complex landscapes of Japan and China's FX markets, explains Hans Jacob Feder, PhD, global head of FX services at MUFG Investor Services.


Asia credit: An outsized winner in the region’s energy transition?

Ross Dilkes, fixed income portfolio manager at Wellington Management, examines the opportunities and risks for bond investors presented by the region’s decarbonisation agenda.

A quiet revolution in Japan’s corporate governance

revolution, Japan, corporate governance, Shareholders, corporate, governance, standards, improvement, Tetsuro Takase, SuMi TrustShareholders in Japan no longer accept below-par corporate governance standards. Changes are taking place, but there are still areas for improvement, says Tetsuro Takase at SuMi Trust.

Why rising demand for healthcare is creating investment opportunities in China

rising demand, healthcare, investment, opportunities, China, Robert St Clair, Investment Strategy, Fullerton Fund ManagementRobert St Clair, head of investment strategy at Fullerton Fund Management, explores the reasons investors should be paying attention to the rising demand for healthcare in China.

Why take advantage of the recent dip in China’s internet sectors

advantage, China, internet, market, OctoberChina's internet market presents one of the most compelling long-term growth potentials for investors today, given the catalysts supporting the sector from both macro and fundamental perspectives, explains Dr Xiaolin Chen, head of international, KraneShares.

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