2024-03-20-ADB-Results_of_the_Survey_on_Financial_Regulators_Initiatives_Regarding_Corporate_ClimateRelated_Disclosures_ADBIADB_Climate_Finance_Dialogue_Progress_Report_13页_344kb

Summary of ADBI Policy Brief No. 2024-3 on Corporate Climate-Related Disclosures

1. Global Context and Asia's Role

• Asia accounts for 40% of global GHG emissions and 60% of coal consumption, with significant growth projected. Meeting 2030 emission targets and accelerating decarbonization requires substantial clean energy investment. Private finance is crucial for scaling up climate investments in the region.

2. Key Global Frameworks

• Task Force on Climate-Related Financial Disclosure (TCFD) Recommendations: Aim to promote climate finance by providing a framework for voluntary disclosure across four pillars: Governance, Strategy, Risk Management, and Metrics and Targets. These recommendations are increasingly adopted globally.
• International Sustainability Standards Board (ISSB) Standards: Based on TCFD inputs, with IFRS S1 and S2 focusing on sustainability-related and climate-specific disclosures. ISSB standards require more detailed GHG emission data (including Scope 3) and have gained support from major economies and organizations like the G7 and IOSCO.
• Differences: TCFD allows flexibility in disclosure, while ISSB Standards are more prescriptive, especially with requirements for absolute emissions data and long-term net-zero targets. Scope 3 emissions disclosure is mandatory under ISSB Standards with a one-year deferral option for complexity.

3. Survey on 12 Asian Economies

• Conducted between November 2023 and January 2024, surveying economies like Japan, PRC, and ROK.
• Key findings:
  • Endorsement of TCFD/ISSB: 42% of economies officially endorsed TCFD recommendations, with 45% setting implementation timelines within 1-3 years.
  • Disclosure Requirements: Most economies enforce mandatory or voluntary "comply or explain" approaches. Requirements include GHG emissions data (Scope 1, 2, and 3) and transition plans, but fewer mandates for climate scenario analysis and long-term net-zero targets.
  • ISSB Adoption: Only 50% plan to fully adopt ISSB Standards in the future; 75% intend to target specific entities (e.g., listed companies). Challenges include the lack of endorsed standards and the high cost of external assurance for disclosures.
  • Common Issues: Reliance on secondary data for Scope 3 emissions, difficulties in integrating international standards with local practices, and varying regulatory approaches across Asia.

4. Challenges and Recommendations

• Data-Related Challenges: Obtaining reliable primary data for Scope 3 emissions is a major hurdle, with many economies relying on secondary data.
• Integration of Standards: Asian economies are adopting divergent approaches, which hinders interoperability and trust in climate finance. Efforts to harmonize with global standards are ongoing but uneven.
• Call for Action: Promote collaborative efforts among Asian financial regulators to enhance information sharing, build capacity, and align disclosure requirements with TCFD/ISSB Standards. Scale up climate finance by encouraging standardized, transparent disclosures to attract private investment and support decarbonization.

5. Conclusion

The survey underscores the growing momentum toward climate-related disclosures in Asia, with many economies moving toward standardization. However, challenges remain in data quality, regulatory divergence, and implementation. Strengthening regional cooperation through initiatives like the ADBI-ADB Climate Finance Dialogue can accelerate progress in achieving climate goals and mobilizing finance.