Over 70 national and sub-national jurisdictions have put a price on carbon emission, and the trend points towards more stringent regulations in the future. Moreover, seven stock exchanges in Southeast Asia have mandated ESG (Environmental, Social, and Governance) reporting. More stock exchanges around the world have ESG mandates on their agenda.
SSE promotes corporate investment in sustainable development. It provides a multi-stakeholder learning platform for stock exchanges, investors, regulators, and companies. It is a market-driven initiative that developed a voluntary disclosure framework and recommendations, enabling stakeholders to understand better the financial system’s exposures to climate-related risks. Main Notations are includes
Creating benefits while responding to stakeholders’ interests | As the repercussions of climate change gain widespread attention, stakeholders such as investors, rating agencies, government, civil society, customers, and employees are all pressuring companies towards taking actions through adapting their products, business models, and investments.
Regulatory compliance | In an effort to combat climate change and prevent abrupt and irreversible changes in the earth’s ecosystem, the Paris Agreement was signed by virtually every country in 2016. All countries in ASEAN are part of the pact and have ratified it, which means their ambitions will be reflected in domestic regulations. Climate-related policies may include tax incentives for renewable energies and related research and development efforts, stricter requirements for obtaining operating permits for high carbon activities, additional fees for high emission activities, etc.
Brand differentiation | With increased awareness of climate change and the environmental footprint of consumerism, shifts in market demand have already been observed. 38% of global consumers are willing to pay higher-than-average prices for products made with sustainable materials, and emerging market consumers’ demand for sustainable products is expected to grow exponentially.
Innovation and opportunity creation | Innovation is necessary for businesses to be more climate-friendly and climate-resilient. New demands from stakeholders spark new opportunities in product and service design and channel more funding into research and development. Leaders in innovation will obtain the first-mover advantage and capture more profits from the new niches.
Operational efficiency | Increased occurrence of extreme weather events such as floods and droughts affect the supply of commodities, which can lead to price fluctuation. For businesses with global value chains, climate impacts elsewhere could disrupt the business-as-usual at home. Operational efficiency helps reduce emissions and stabilize supplies while bringing cost-saving benefits to your performance.
Talent attraction, engagement, and retention | Talent is among the most critical assets for businesses. Being the preferred employer and an ideal workplace for talents brings your organization an edge. 76% of Millennials consider a company’s social and environmental commitments when deciding where to work.
Capital access | While the momentum for sustainable investment has emerged many decades ago, it was not until the early 2010s that investor interest in the topic has truly taken off. Global sustainable investments have surged by 34% between 2016 and 2018, to a total of over US$30 trillion. This growth is expected to continue in the coming years, as investors increasingly recognize and aim to address climate change-related risks and opportunities.