Data Challenges and Opportunities for  
ESG and Sustainable Finance in Asia Pacific  
December 2020

REPORT PARTNERS 
 
 
ASIFMA is an independent, regional trade association with over 140 member firms comprising a 
diverse range of leading financial institutions from both the buy and sell side including banks, asset 
managers, law firms and market infrastructure service providers. Together, we harness the shared 
interests of the financial industry to promote the development of liquid, deep and broad capital 
markets in Asia. ASIFMA advocates stable, innovative and competitive Asian capital markets that are 
necessary to support the region’s economic growth. We drive consensus, advocate solutions and 
effect change around key issues through the collective strength and clarity of one industry voice. Our 
many initiatives include consultations with regulators and exchanges, development of uniform 
industry standards, advocacy for enhanced markets through policy papers, and lowering the cost of 
doing business in the region. Through the GFMA alliance with SIFMA in the US and AFME in Europe, 
ASIFMA also provides insights on global best practices and standards to benefit the region. 
www.asifma.org  
 
 
 
 
 
 
There is now global acknowledgement that the climate crisis is a real and immediate threat, climate 
concerns as well as broader environmental and social considerations need to start moving into 
mainstream risk assessment and opportunity analysis. Capital markets are not understanding and 
integrating material sustainability considerations into their investment decisions, often resulting in 
capital being allocated to inefficient and even environmentally or socially damaging projects and 
assets. FoSDA has been formed to address this urgent situation from a data perspective and foster 
collaboration in the ecosystem. https://futureofsustainabledata.com  
 
 
 
 
 
 
 
 
 
Disclaimer 
The information and opinion commentary in this Paper by the Asia Securities Industry and Financial Markets Association 
(ASIFMA) in to reflect the views of ASIFMA members as well as discussions and events organised as part of its partnership 
with the FOSDA alliance. The authors believe that the information in the Paper, which has been obtained from multiple 
sources believed to be reliable, is reliable as of the date of publication. As estimates and commentary by individual sources 
may differ from one another, estimates and commentary for similar types of discussions could vary within the Paper. In no 
event, however, do the authors make any representation as to the accuracy or completeness of such information. The 
authors have no obligation to update, modify or amend the information in this Paper or to otherwise notify readers if any 
information in the Paper becomes outdated or inaccurate. The authors will make every effort to include updated information 
as it becomes available and in subsequent Papers.

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Contents 
Executive Summary ................................................................................................................................. 4 
1. 
Introduction .................................................................................................................................... 6 
Future of Sustainable Data Alliance .................................................................................................... 6 
ASIFMA Virtual Events on ESG Data Challenges in Asia ...................................................................... 6 
Definition ............................................................................................................................................ 7 
2. 
Sustainable Finance in Asia ............................................................................................................. 8 
Financing Gap .................................................................................................................................... 10 
International Cooperation ................................................................................................................ 11 
IOSCO ............................................................................................................................................ 12 
FSB ................................................................................................................................................. 13 
Regulation and Policymaking ............................................................................................................ 13 
3. 
Data, ESG and Sustainable Finance ............................................................................................... 15 
Data Practices Today ......................................................................................................................... 15 
Measuring E, S and G .................................................................................................................... 15 
Data Sources and Analysis ............................................................................................................ 15 
Data Challenges ................................................................................................................................ 16 
Lack of Standardisation and Comparability .................................................................................. 16 
Data Availability ............................................................................................................................ 18 
Reliability of Third Parties ............................................................................................................. 19 
Forward- vs Backward-looking Perspectives ................................................................................ 19 
Accessibility and Interpretability .................................................................................................. 20 
Interoperability with Financial Risk Assessment ........................................................................... 20 
4. 
Digitalisation & Emerging Technologies ....................................................................................... 22 
Data Collection and Analysis ......................................................................................................... 22 
Auditing and Monitoring ............................................................................................................... 22 
Risk Management ......................................................................................................................... 22 
Energy Efficiency ........................................................................................................................... 23 
Scaling ESG Enabling Technologies ................................................................................................... 23 
5. 
Conclusion ..................................................................................................................................... 24 
Recommendations ............................................................................................................................ 24

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Executive Summary  
The Covid-19 pandemic highlights the importance of ESG and sustainable finance, with inflows into 
high-ESG products globally up 40% in Q1 2020 as ESG continues to become mainstream.  At the 
same time, climate risks are rising in Asia, with Bangladesh, China, Indonesia, Japan, India and 
Vietnam all particularly exposed to rising sea levels and with potential exposure to higher credit risk. 
Negative environmental and social impacts are starting to become evident in some sectors; 
therefore ESG monitoring is becoming increasingly critical to management of financial risk also.   
 
Sustainable Finance in Asia  
ESG investing in East Asia trails other regions globally with just 5% of AUM invested in sustainable 
projects, compared to 30% in North America; however, this is changing as institutions such as 
Japan’s Government Pension Investment Fund and MUFG Bank adopted wide-scale ESG criteria, and 
markets like China, Hong Kong and Singapore look to scale green and sustainable finance markets.  
The largest regional climate finance investment needed is in Asia, estimated at USD $66 Trillion over 
three decades, which is over half the investment required globally to achieve a scenario of limiting 
temperature rise to 1.5° Celsius. This is driven by the scale and pace of growth of Asia's economies, 
growing population, increasing urbanisation, and rapid industrialisation in the region. 
  
Data, ESG and Sustainable Finance 
Yet future growth of ESG investment in Asia is inextricably linked to data – its availability, 
accessibility, reliability and comparability. When asked to nominate the greatest data challenge in 
ESG and sustainable finance, 56% of respondents reported ‘inconsistent data’. Significantly, there is 
no standardisation to measurement of E, S, and G factors. Additionally, individual ESG metrics vary 
not only between industries and markets, but also between companies in the same industry, with 
the quality of company disclosures differing widely.  
  
Data Challenges 
Firms and investors are navigating a confusing landscape of disclosure frameworks, incentive 
structures, data collection methods, and external assessments developed and implemented in 
various markets and jurisdictions by both the public and private sectors. Variation is evident not only 
between markets, but also within markets.  
 
There is also no single binding global taxonomy, and the industry wants to see greater harmonisation 
yet a principles-based approach that allows for tailoring the each region’s specific conditions, such as 
relative levels of economic development.    
 
Even when data is available, 35% of respondents cite ‘poor quality data’ as the greatest challenge.   
There are quality third party providers, however reliance on a single data source can resulting in 
volatile indicators over time. Another concern lies in compatibility between the vendor’s 
methodology and metrics, including in relation to what the investor is trying to monitor. 
  
Digitalisation & Emerging Technologies  
Technology is part of the answer, but not all of it. Technologies and associated business models are 
evolving rapidly, spanning AI, robotics, big data, blockchain, and the Internet of Things (IoT) amongst 
other solutions.  Asked what is needed most to scale ESG and sustainable finance enabling 
technologies, however, nearly half of respondents to a 2020 ASIFMA/FOSDA poll prioritise ‘policy 
and regulation to support innovation’.

Page 5 
 
 
 
 
Recommendations 
ASIFMA offers the following 8 key recommendations, critical to supporting and enabling the 
further development of green and sustainable markets in Asia:: 
1. A greater convergence towards a principles-based global (or at least regional) 
taxonomy 
2. Higher, more consistent corporate disclosure standards between jurisdictions and 
sectors 
3. Encouragement of higher standards of analysis, with incentives for more holistic and 
robust approaches to ESG measurement and analysis 
4. Policy and regulation to support innovation and technologies that enable ESG and 
sustainable finance capabilities 
5. A focus on education and skills to support ESG and sustainable finance capability 
6. Higher standards and accountability for ESG ratings providers, potentially including 
regulation, and clear and harmonised requirements for product disclosure  
7. Harmonisation between ESG standards and frameworks such as UN SDGs, and policy 
on climate change and bank supervision at systemic level, including on climate risk 
8. Ongoing partnership and dialogue between the public and private sectors, as well as 
between stakeholders such companies and investors on disclosure and reporting 
standards

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1.   Introduction 
 
Future of Sustainable Data Alliance 
The Asia Securities Industry and Financial Markets Association (ASIFMA) is a partner of the Future of 
Sustainable Data Alliance (FOSDA) and is leading the Asia workstream, to understand data challenges 
for environmental, social, and governance (ESG) and Sustainable Finance in the Asia Pacific region.  
 
FOSDA seeks to address the following question:  
 
What data do investors and governments need to meet the requirements of regulators, 
citizens and market demand for sustainable investments and portfolios before 2030? 
 
FOSDA’s key objectives are to: 
 
1. Articulate future ESG data requirements of investors and governments to accurately 
integrate ESG data into decision making; 
2. Promote new technology capabilities and data by highlighting the key role that new 
technology and data sets must play in the transition to sustainable development; and 
3. Address UN Sustainable Development Goals (“SDGs”) related data needs and how to satisfy 
them for investors wanting to take greater account of SDG-related risks and impacts. 
 
ASIFMA Virtual Events on ESG Data Challenges in Asia 
As part of its workstream on ESG data challenges, ASIFMA, in collaboration with FOSDA, organised 
two virtual panel discussions ‘Navigating ESG and Sustainable Finance in Asia’ 1 and ‘ESG and 
Sustainable Finance in Asia: the Fintech and Data Challenge’ 2 on 14 July and 28 October 2020, 
respectively. The two events were attended by around 500 stakeholders, including market 
participants from the buy and sell sides, specialists, consultants in the ESG and sustainable finance 
field, policymakers and regulators.  
 
In addition to audience participants, ASIFMA is grateful to the following speakers and panellists who 
took part in the two virtual discussions (listed in alphabetic order by organisation name): 
 
- Ramesh Subramaniam – Director General of the Southeast Asia Regional Department, Asian 
Development Bank; 
- Matthew Chan – Head of Public Policy and Regulatory Affairs, ASIFMA;  
- Amar Gill – Managing Director and Head of Investment Stewardship, APAC, BlackRock;  
- Gabriel Wilson-Otto – Global Head of Sustainability Research, BNP Paribas Asset Management; 
- Elree Winnett Seelig – Head of ESG, Markets & Securities Services, Citi; 
- Kamran Khan – Head of ESG for Asia Pacific, Deutsche Bank; 
- Jason Wincuinas – Senior Editor, Thought Leadership Asia, Economist Intelligence Unit; 
- Eugene Goyne – EY Asia-Pacific Financial Services Regulatory Lead, EY; 
- Helene Li – General Manager / Founder, Fintech Association of Hong Kong / Golmpact; 
- Helena Fung – Head of Sustainable Investment Asia-Pacific, FTSE Russell;  
- Grace Hui – Head of Green and Sustainable Finance, Markets Division, Hong Kong Exchanges 
and Clearing Limited;  
- Paul Andrews – Secretary General, IOSCO;  
 
1 Video recording may be accessed here: https://youtu.be/E-SiPlJc8CM 
2 Video recording may be accessed here: https://www.youtube.com/watch?v=TSbDcd-mfQI&feature=youtu.be

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- Wang Yao – Director General, International Institute of Green Finance, Central University of 
Finance and Economics (Beijing); 
- Satoshi Ikeda – Chief Sustainable Finance Officer, Japan Financial Services Agency; and  
- Julia Walker – member of the Cambridge Institute of Sustainable Leadership, advisor at the 
Asian Institute of International Financial Law, and member of the United Nations Task Force 
of Digital Financing of the Sustainable Development Goals 
 
Whilst it does not purport to represent the views of these individuals, this paper draws from 
discussion during the two events, plus research referenced during the sessions. We are grateful for 
the insights and thought leadership provided by the various participants. 
 
Definition 
For the purposes of this report, we define ‘sustainable finance’ broadly to include climate, green and 
social finance; consideration of longer-term economic sustainability of organisations being funded; 
as well as the role and stability of the overall financial system. As such, this broader definition also 
includes ESG investment, and is in line with definitions used by IOSCO3, GFMA4 and ICMA5. 
 
 
 
 
3 IOSCO. Sustainable finance in emerging markets and the role of securities regulators. (2019) 
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD630.pdf  
4 GFMA and BCG. Climate Finance Markets and The Real Economy. (2020)  
https://www.sifma.org/wp-content/uploads/2020/12/Climate-Finance-Markets-and-the-Real-Economy.pdf  
5 ICMA. Sustainable Finance High-level definitions. (2020) 
https://www.icmagroup.org/assets/documents/Regulatory/Green-Bonds/Sustainable-Finance-High-Level-
Definitions-May-2020-110520v4.pdf

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2.   Sustainable Finance in Asia 
The Covid-19 pandemic highlights the importance of ESG and sustainable finance, with high-ESG 
product investment flows up 40% globally in Q1 2020 as ESG continues to become mainstream.6 At 
the same time, climate risks are rising in Asia, with Bangladesh, China, Indonesia, Japan, India and 
Vietnam all particularly exposed to rising sea levels and with potential exposure to higher credit 
risk.7 According to some commentators, negative environmental and social impacts are starting to 
become evident in some sectors, and therefore ESG monitoring is becoming increasingly critical to 
management of financial risk itself.8 
 
 
In parallel, ESG and sustainability-related investment has become increasingly important in Asia, 
with EIU research, based on a 2019 survey of senior and C-suite drawn from sovereign and pension 
funds, investment banks and insurance funds across Asia, noting 95% of respondents now believe 
ESG investing is important to their firm, with 92% saying it will become even more important in 
coming years and 80% saying ESG has a positive impact on returns, in sharp contrast to sentiment as 
little as a decade earlier9.  In addition, policymakers and exchanges increasingly see sustainable 
finance as a growth business. 
 
The 2020 EIU report notes that regional distribution is uneven globally, with East Asia trailing other 
markets at just 5% of AUM invested in sustainable projects compared to 30% in North America; 
however, the same report notes that this is changing as institutions such as Japan’s Government 
Pension Investment Fund (“GPIF”) and MUFG Bank adopted wide-scale ESG criteria encourage the 
overall trend of ESG integration into the investment process. 
 
Though non-exhaustive, key developments in Asia include: 
• 
Japan is taking a leadership position in Asia, with FSA (which is part of both the Network for 
the Greening of the Financial System and IOSCO’s Taskforce Sustainable Finance), playing a 
key role in promoting sustainable finance and ESG.  
- Policy-wise, Japan has taken a principles approach, which has helped accelerate 
scaling of the market and is reflected in the FSA’s 2020 revision of its Stewardship 
Code for corporate governance.10 
- Through the code and other measures, the FSA is encouraging institutional investors 
to focus on ESG and corporates to enhance disclosure standards. 
- The FSA has also been fostering dialogue between institutional investors and 
corporates on implementing FSB Task Force on Climate-related Financial Disclosures 
(TCFD) standards for consistent climate-related financial risk disclosures, including 
data challenges and the enablement of greater granularity in what is measured. 
• 
In Hong Kong, as part of its commitment to sustainability, HKEX has launched its Sustainable 
and Green Exchange (STAGE), an online portal to provide information transparency on 
sustainable, green and social investment products. 
 
6 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM 
7 EIU. Sustainable and actionable: An ESG study of climate and social challenges for Asia. (2020) 
https://perspectives.eiu.com/sites/default/files/sustainable_and_actionable_report_2.pdf  
8 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM 
7 EIU. Green Intelligence: Asia’s ESG investing, data Integrity and technology. (2019) 
https://eiuperspectives.economist.com/sites/default/files/green_intelligence_eiu_e_fund.pdf  
10 FSA. Finalization of Japan’s Stewardship Code (Second revised version). (2020) 
https://www.fsa.go.jp/en/refer/councils/stewardship/20200324.html

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- This is intended to encourage dialogue between issuers, asset managers, investors 
and professional advisers on sustainable and green finance. 
- STAGE will promote transparency and accessibility across all product types and asset 
class, and is believed to be one of the first of its kind in Asia.11  
- In addition, a cross-agency steering group as been set up by government agencies to 
grow and scale Hong Kong as a green and sustainable finance centre. 
• 
In Singapore, MAS is also working on a comprehensive, long-term strategy to make 
sustainable finance a defining feature of Singapore's role as an international financial centre, 
alongside wealth management and FinTech.12 
- SGX is investing SGD 20 million in a multi-pronged expansion of its sustainability 
capabilities and initiatives. 
- Half of this will go towards new ESG-focused products, services and platforms, while 
the other half will be channelled into capacity building for the financial ecosystem, 
strengthening internal capabilities and increasing CSR commitments. 
- All sustainability initiatives will be housed under a newly launched multi-partner, 
multi-asset sustainability platform, SGX FIRST. 
• 
In China, ESG is increasingly a focus for investors and asset owners.13 From a policy 
perspective, the PBOC consulted the market on updating its 2020 Green Bond Endorsed 
Project Catalogue recently, with the proposed changes bringing it more in line with other 
international taxonomies in relation to fossil fuels.14  
- This is part of China’s efforts to further promote green finance, starting with top-
down policy with cross agency efforts being led by the PBOC. 
- Other initiatives include standardising green credit guidelines, and green trust fund 
and insurance standards, whilst encouraging innovation, and green pilots spanning 
policy and other measures to foster green transition at the provincial level.15 
- Other efforts include supporting international cooperation, with PBOC active in 
NGFS and platforms such as IFC’s sustainable banking network,16 and Green Finance 
Principles in ‘One Belt One Road’ countries.17 
- Disclosure of ESG is in transition from a voluntary to a mandatory regime, with CSRC 
expected to launch settings on this soon, with ESG index providers now numbering.  
 
 
 
 
11 HKEX. HKEX’s Sustainable & Green Exchange. (2020) 
https://www.hkex.com.hk/eng/stage/index.htm 
12 MAS. Sustainable Finance. (2020) 
https://www.mas.gov.sg/development/sustainable-finance  
13 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM 
14 ASIFMA. ASIFMA Response to Consultation of 2020 Green Bond Endorsed Project Catalogue. (2020) 
https://www.asifma.org/wp-content/uploads/2020/06/asifma-response-to-china-2020-green-bond-catalogue-
consultation-final-eng-chn.pdf 
15 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM 
16 IFC. Sustainable Banking Network. (2020) 
https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-
ifc/company-resources/sustainable-finance/sbn_whatsnew 
17 The Belt and Road Initiative (BRI). The Belt and Road Initiative. (2019) 
https://green-bri.org/tag/green-investment-principles-gip

Page 10 
More generally, there is significant growing emphasis on integrating sustainability into general 
business and financial decision-making, with climate and sustainability risks considered increasingly 
as part of the broader financial risks, with implications for cost and availability of capital for firms 
and projects. There is also a broadening of perspective from looking at sustainability through a risk 
lens towards seeking investments with explicit societal benefits and social upside from business 
models.18 
 
On the fixed income front, Asia stands at the forefront according another piece of EIU research,19 
with green-labelled instruments playing a role in funding renewable energy projects. According to 
the EIU, The International Energy Agency estimates that emerging markets will add about 4,000GW 
of new capacity by 2040, representing two-thirds of the global increase and of which half is 
attributable to China and India alone.  
 
Since 2013, a variety of green and social bonds have come to the market in Asia, including: 
• 
Social Bonds 
• 
Sustainability Bonds 
• 
Sukuk Bonds 
• 
Transition Bonds 
• 
Sustainability Bon
 
Financing Gap  
According to a study by the Asia Development Bank (ADB) in 2017, Developing Asia would need 
approximately $26 trillion in infrastructure investment from 2016 to 2030 (or $1.7 trillion per year) 
in order to maintain growth, eradicate poverty, and respond to climate change (climate-adjusted 
estimate). The UN estimates roughly $3-$5 trillion is needed annually and globally to reach the SDGs. 
Even before the Covid-19 pandemic, the region in total faced a substantial investment gap of $459 
billion per year ($907 billion p.a. if including social infrastructure).20 A GFMA/BCG report in 2020 
found that the largest regional climate finance investment needed is in Asia, estimated at USD $66 
Trillion over three decades, or over half the investment required globally to achieve a scenario of 
limiting temperature rise to 1.5° Celsius. This is reflective of the scale and pace of growth of Asia's 
economies, growing population, increasing urbanisation, and rapid industrialisation in the region. 21 
 
 
18 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM 
19 EIU. Sustainable and actionable: An ESG study of climate and social challenges for Asia. (2020) 
https://perspectives.eiu.com/sites/default/files/sustainable_and_actionable_report_2.pdf  
20 Asia Development Bank. Meeting Asia’s Infrastructure Needs. (2017) 
https://www.adb.org/sites/default/files/publication/227496/special-report-infrastructure-highlights.pdf  
21 GFMA and BCG. Climate Finance Markets and The Real Economy. (2020)  
https://www.sifma.org/wp-content/uploads/2020/12/Climate-Finance-Markets-and-the-Real-Economy.pdf

Page 11 
 
 
The Covid-19 pandemic has likely exacerbated these conditions, with increasing unemployment and 
heavier lockdown stress on private enterprises. Economic contraction in developing Asia is estimated 
to be 0.7% – a 60 year high – and 3.8% in Southeast Asia alone. The post-Covid youth unemployment 
figure is now estimated to be between 10 – 15 million across 13 APAC countries.22 The post-
pandemic economic strain is likely to widen the investment gap and lead to increasing credit risks 
due to ESG factors.  
 
According to the ADB, the gap should be filled by both public and private sectors. Public finance 
reforms can generate additional revenues through prudent borrowing and by reorienting spending, 
while the private sector may need to mobilise considerable private capital which is available but not 
yet tapped. The OECD noted that in 2019, private pension assets make up $32 trillion in OECD 
countries and $0.7 trillion in 29 other non-OECD reporting jurisdictions.23 This data reveals that there 
is potential for private capital to be mobilised, whether through ESG investments or other channels, 
to bridge the financing gap; however, the key challenge remains in terms of how to stimulate 
sufficient quantities of quality private investment, in light of the constrained flows for many ASEAN 
countries.  
 
International Cooperation 
Over the course of several years, there has been a drastic increase in private and public sector-led 
initiatives in response to the rising importance of climate and environment related issues. Within 
2020 alone, various governments and financial regulators around the world have pushed for the 
development of green and sustainable markets, and whilst this global response to the climate crisis 
is a positive step forward in enabling the financial sector to scale green finance, the existence of 
multiple frameworks from different bodies could very likely lead to market fragmentation and 
unintended consequences.  
 
In response to the shifts in both public and private sectors, global bodies have begun taking steps to 
harmonise the international response, with bodies such as IOSCO setting up a taskforce this year to 
identify commonalities across different guidelines from across the world with a view to developing 
harmonised sustainability disclosure standards, and the G30, which in October 2020 published a 
report with a series of recommendations to accelerate the global transition towards a net zero 
 
22 Sustainable Development Report 2020 (J Sachs et al; Bertlesman, SDSN, Cambridge). (2020) 
https://s3.amazonaws.com/sustainabledevelopment.report/2020/2020_sustainable_development_report.pdf  
23 OECD. Pension Markets in Focus. (2020) https://www.oecd.org/daf/fin/private-pensions/Pension-Markets-
in-Focus-2020.pdf

Page 12 
carbon economy.24 In addition, the International Financial Reporting Standards Foundation (IFRS) in 
September 2020 has also launched a consultation with an aim to establish a global approach to 
sustainability reporting that could help consolidate different initiatives and avoid fragmentation 
across different jurisdictions. 
 
In 2019, Argentina, Canada, Chile, China, the EU, India, Kenya and Morocco launched the 
International Platform on Sustainable Finance (IPSF), since joined by the, Indonesia, Japan, New 
Zealand, Norway, Senegal, Singapore and Switzerland. A working group led by China and Europe 
has been set up to explore harmonisation of sustainable finance taxonomies.  
 
IOSCO 
IOSCO has acknowledged the rising importance of ESG matters and sustainable finance more 
generally, and is focused on related investor protection and transparency in markets as well as in 
mitigating systemic risks. In October 2018, IOSCO established its sustainable finance network (“SFN”) 
as a platform to connect interested IOSCO members and to exchange information and experiences. 
In January 2019, IOSCO issued a statement on ESG disclosures by issuers and published, 25 through its 
Growth and Emerging Markets Committee a report related to sustainable finance in emerging 
markets.26 A further report on the overarching role of IOSCO and securities regulators was published 
in April 2020,27 and identified three key concerns:  
 
1. 
Multiple and diverse sustainability frameworks and standards; 
2. 
Lack of common definitions of sustainable activities; and 
3. 
Greenwashing and other investor protection challenges. 
 
As a result of the SFN’s work, the IOSCO Board agreed in February 2020 to establish a Board-level 
Task Force on Sustainable Finance (“STF”), aimed at enabling IOSCO to play a driving role in global 
efforts to address the issues described in its 2020 report.28  
 
IOSCO’s current efforts to address ESG and the above challenges include exploration by the STF of 
the following: 
 
(i) 
Improving sustainability–related disclosures by issuers (WS1). WS1 will explore 
avenues for improving sustainability disclosures made by issuers – with a focus on 
climate change-related disclosures in the first instance. This work will include engaging 
with and influencing initiatives underway by sustainability disclosures standard setters 
that are exploring ways to reduce fragmentation in disclosure frameworks and 
standards and considering how existing standards can provide the basis for a unifying 
system that can serve providers of capital and stakeholders more widely.  
 
 
24 G30. Mainstreaming the Transition to a Net-Zero Economy. (2020) 
https://group30.org/images/uploads/publications/G30_Mainstreaming_the_Transition_to_a_Net-
Zero_Economy.pdf  
25 IOSCO. Statement on Disclosure of ESG Matters by Issuers. (2019) 
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD619.pdf 
26 IOSCO. Sustainable finance in emerging markets and the role of securities regulators. (2019) 
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD630.pdf  
27 IOSCO. Sustainable Finance and the Role of Securities Regulators and IOSCO. (2020) 
https://www.iosco.org/library/pubdocs/pdf/IOSCOPD652.pdf 
28 IOSCO. IOSCO steps up its efforts to address issues around sustainability and climate change. (2020) 
https://www.iosco.org/news/pdf/IOSCONEWS564.pdf

Page 13 
(ii)  Promoting investor protection with regard to asset management matters, including 
addressing greenwashing (WS2). WS2 will identify relevant practices and experiences in 
relation to the consideration of climate change as a financial risk and the use of 
sustainability-related factors in the investment decision process of asset managers. WS2 
work will aim to result in specific metrics that can be arranged into relevant categories 
of disclosures, which could support investor protection.  
 
(iii)  Addressing ESG ratings and data providers (WS3). WS3 will assist members in 
understanding the implications of the increasing activity of the ESG data providers, 
including CRAs with regard to ESG ratings. WS3 will look into methodologies for ESG 
ratings and indices and supervisory practices relating to ESG ratings, with a particular 
focus on their climate-related aspects.  
 
IOSCO is committed to work in collaboration with other international bodies in an effort to avoid 
duplicative efforts and to enhance coordination of relevant regulatory and supervisory approaches. 
 
FSB 
The FSB established the Task Force on Climate-related Financial Disclosures (TCFD) to develop 
recommendations for more effective climate-related disclosures in order to support more informed 
investment, credit, and insurance underwriting decisions and, in turn, enable stakeholders to 
understand better the concentrations of carbon-related assets in the financial sector and the 
financial system’s exposures to climate-related risks. 
 
A 2017 TCFD recommendations report outlines the TCFD framework for reporting climate-related 
financial information29.  The TCFD is currently holding a consultation forward-looking metrics 
to be disclosed by financial institutions, with submissions due in January 2021. 
 
Regulation and Policymaking 
ASIFMA published a paper in March 2020, titled ‘Sustainable Finance in Asia Pacific: Regulatory State 
of Play’30. It calls for greater harmonisation of standards, frameworks and policymaking to shift the 
financial system to a more sustainable footing, in addition to industry participants having a role to 
play alongside the official sector in developing capabilities and market structures to support the 
growth and scaling of sustainable finance and the transition to a low-carbon global economy. 
 
To achieve this, ASIFMA encourages policymakers and regulators to:  
- 
Engage directly with the private sector in their own markets through transparent 
consultation processes during the development stage of taxonomy, prudential 
requirements, and ESG reporting and disclosure requirements; and  
- 
Ensure that they take a coordinated regulatory approach internationally, with 
commitment from regulators in all major jurisdictions to achieve greater international 
consistency, ranging from approaches towards taxonomies and corporate disclosure to 
measurement of climate related risks and use of incentives and other mechanisms to 
prevent market failure. 
 
 
 
 
29 TCFD. Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures. (2017) 
https://assets.bbhub.io/company/sites/60/2020/10/FINAL-2017-TCFD-Report-11052018.pdf  
30 ASIFMA. Sustainable Finance in Asia Pacific Regulatory State of play. (2020) https://www.asifma.org/wp-
content/uploads/2020/03/sustainable-finance-in-asia-pacific.pdf

Page 14 
In addition to consistent and representative taxonomies, the paper calls for coherent disclosure 
frameworks on key material factors connecting all segments of the investment cycle – from 
companies to investment management companies, to their shareholders and clients. This will ensure 
transparency and comparability between sustainability metrics throughout the economy, but 
requires clear thinking between the private and public sector about the data needed to support this.

Page 15 
3.   Data, ESG and Sustainable Finance 
  
Data Practices Today  
In broad terms, investors and investment managers in Asia use a combination of information to 
inform ESG investment, including disclosed information, data from third parties, and raw data which 
needs to be sourced and analysed in-house. This is then further analysed to inform investment 
decisions. Approaches to data analysis can be a source of competitive advantage for asset managers.  
 
Measuring E, S and G  
For ESG investment specifically, according to the EIU’s 2019 study,31 nearly half (48%) of the 2019 
EIU survey respondents said they weight Environmental (E), Governance (G), and Social (S) factors 
equally. 24% said they weight E factors highest, 19% weigh S factors highest, and 15% weight G 
factors highest. A major driver, as noted by EIU, is mainland China’s increasing focus on 
environmental protection, perhaps more so than other jurisdictions in the region. 
According to the 2019 EIU study, the top metrics used to quantify E factors include: 
• 
Environmental technology contribution (47% of survey respondents); 
• 
Environmental information disclosure (35%); and 
• 
Climate action (31%). 
 
Meanwhile the same study found the top S metrics include: 
• 
Safety Management (44%); 
• 
Diversity and Inclusion practices (44%); 
• 
Sustainable cities and communities goals (42%); 
• 
Standard certification (37%); 
• 
Health and Wellbeing (35%); and 
• 
Quality education (30%). 
 
Top metrics to quantify G factors include: 
• 
Efficiency of capital (51%); 
• 
Anti-money laundering (AML) compliance 36%; 
• 
Related party transactions (conflict of interest) (36%); and 
• 
External Auditing (33%). 
 
The 2019 EIU study notes significant overlap between E, S, and G factors in practice. For example, 
climate change can have both E and S implications and, as a result, some practitioners may resist 
classifying metrics into separate categories,32 suggesting a fundamental divergence in analytical 
approach. 
 
Data Sources and Analysis 
Today, according to the EIU research, ESG data is gathered from a wide range of sources, from 
official disclosures and third-party sources, to NGO reports, bilateral meetings and social media. 
Other sources include government and non-government organisation (NGO) databases. Whilst 
public data offers a more holistic picture, it is largely underutilised due to formatting that is often 
incomprehensible. Since much of the information from these sources is unstructured, Artificial 
 
31 EIU. Green Intelligence: Asia’s ESG investing, data Integrity and technology. (2019) 
https://eiuperspectives.economist.com/sites/default/files/green_intelligence_eiu_e_fund.pdf  
32 Ibid.

Page 16 
Intelligence (AI) is becoming more prevalent in translating extensive unstructured data into 
meaningful and useful information. 
 
When asked what type of data their firms are using for ESG assessment, nearly half of respondents 
to a 2020 ASIFMA/FOSDA poll reported using an equal amount of in-house and third-party sources, 
whilst 17% used mostly in-house and 19% used mostly third-party ratings.33 
 
Figure 1. If your firm is undertaking ESG assessment, what type of data is it using? (Source: ASIFMA Virtual Event Poll, July 
2020) 
 
 
Data Challenges  
According to the 2019 EIU study, future growth of ESG investment in Asia is inextricably linked to 
data. When asked to list the general obstacles to further developing ESG integration, respondents 
continually refer to data challenges overall: 
• 
32% nominated inadequacy of ESG data; 
• 
31% said there is not enough ESG data to make consistent decisions; 
• 
30% said a lack of clarity around ESG standards, terminology and metrics; and 
• 
26% mentioned ESG ratings and data applications being inconsistent; and  
• 
24% mentioned low transparency with regard to ESG-data sources. 
 
In contrast, the only two non-data related barriers raised by respondents were lack of awareness 
and understanding of ESG (36%) and lack of client demand (20%).34 
 
Lack of Standardisation and Comparability 
Significantly, there is no standardisation to measurement of E, S, and G factors. According to the 
2019 EIU study, S factors in particular are the most difficult to measure, with analysts needing to 
weigh the value of very unstructured data (e.g. a complaint on social media, which may or may not 
portend fundamental issues).35 Additionally, individual ESG metrics vary not only between industries 
and markets, but also between companies in the same industry, with the quality of company 
 
33 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM 
34 EIU. Green Intelligence: Asia’s ESG investing, data Integrity and technology. (2019) 
https://eiuperspectives.economist.com/sites/default/files/green_intelligence_eiu_e_fund.pdf    
35 Ibid.  
17%
48%
19%
16%
Mostly in-house research
About 50/50 in-house research and third party
Mostly third-party ratings
Mostly third-party other (e.g. research)

Page 17 
disclosures differing widely.36 This results in difficulties in a lack of comparability between projects, 
companies, industries and markets as well as market distortions and skewed investment 
decisions,37,38 while the 2020 EIU report notes this also leads to greenwashing, against which 
investors perceive a lack of contractual protection.39 This is compounded when third-party data is 
used, with vendors using different methodologies for even the same metric.40 
 
When asked to nominate the greatest data challenge in ESG and sustainable finance, 56% of 
respondents to a 2020 ASIFMA/FOSDA poll reported ‘inconsistent data’41. The EIU notes that this 
complexity in itself is a disincentive for companies to issue green securities.42  
 
Figure 2. What is the greatest data challenge for ESG/sustainability? (Source: ASIFMA Virtual Poll, July 2020) 
 
 
The industry notes the UNDP’s current work with the NGFS to tighten the UN SDGs, capturing the 
evolution and growth of sustainable finance since 2016, and tightening of reporting standards. In 
this area as well, there has been a proliferation of standards and initiatives, resulting in 
accountability concerns, efficiency challenges and comparability issues.  
 
Disclosure 
Firms and investors are navigating a confusing landscape of disclosure frameworks, incentive 
structures, data collection methods, and external assessments developed and implemented in 
various markets and jurisdictions by both the public and private sectors. From a disclosure 
perspective, this variation exists in both substance and form. Variation is evident not only between 
markets, but also within markets. As an example, in China, the 2019 EIU report notes that while 
 
36 ASIFMA. ASIFMA Response to Bank Negara Malaysia’s Discussion Paper on Climate Change and Principle-
based Taxonomy. (2020) 
https://www.asifma.org/wp-content/uploads/2020/04/asifma-response-to-bnm-climate-change-taxonomy-
dp-v20200331-final-draft-clean4.pdf 
37 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM 
38 Green Intelligence: Asia’s ESG investing, data integrity and technology. (2019) 
https://perspectives.eiu.com/sites/default/files/green_intelligence_eiu_e_fund.pdf 
39 EIU. Sustainable and actionable: An ESG study of climate and social challenges for Asia. (2020) 
https://perspectives.eiu.com/sites/default/files/sustainable_and_actionable_report_2.pdf 
40 Ibid.  
41 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM 
42 EIU. Sustainable and actionable: An ESG study of climate and social challenges for Asia. (2020) 
https://perspectives.eiu.com/sites/default/files/sustainable_and_actionable_report_2.pdf 
9%
35%
56%
Missing data
Poor quality data
Inconsistent data

Page 18 
there are different reporting requirements by province, the format in which data can be provided 
also varies between PDF, Word and JPG file formats.43 
 
Other issues relate to the quality and integrity of data provided by corporates themselves. For 
example, an international power utility may provide only metrics of its carbon emissions in one 
market that it operates, where standards may be higher (e.g. Hong Kong), whereas metrics from 
other markets (e.g. China) representing the majority of its activities may be excluded. This gives a 
distorted and misleading account of its activities.44 This can only be partially addressed through 
more direct engagement between, say an investment manager and investee companies. 
 
Tightening disclosure standards will improve quality issues, which was nominated by over a third of 
respondents to the 2020 ASIFMA/FOSDA poll, above. The 2020 GFMA/BCG report recommends 
mandatory disclosure of corporate-specific, financially material, decision-relevant data relating to 
climate risks and opportunities on the basis that consistent global disclosure frameworks, developed 
in consultation with industry participants and with adequate runway for implementation, will 
strengthen the transparency and comparability of climate risk data.45   
 
Taxonomy 
Currently, there exists no single binding global taxonomy, and classification systems for ‘green’ 
assets or products differ widely across jurisdictions and industries. While the EU’s leadership in 
establishing its taxonomy is a step forward in scaling green finance, there is uncertainty as to how 
this, which has been constructed from a European perspective, may impact the Asia Pacific region if 
it were to become the de facto global standard without taking into account the needs and nuances 
of a region like Asia where there are countries of varied levels of economic development. Also, EU 
taxonomy and disclosure regulations have been described as binary, classifying economic activities 
as ‘green’ and ‘non-green’, but providing no incentive for transitional activities.46 
 
The industry welcomes leadership of jurisdictions like China and Malaysia’s efforts to define 
taxonomies, but calls for greater regional and global harmonisation, interoperability between 
jurisdictions, and principles-based approaches, alongside clear and detailed definitions of 
sustainable activities.47 We welcome efforts the EU and China to explore commonalities between 
existing taxonomies. An international approach will help address the data-comparability concerns of 
the 56% of respondents to the 2020 ASIFMA/FOSDA poll above.  
 
Data Availability 
When asked to nominate the greatest data challenge in ESG and sustainable finance, 35% cited ‘poor 
quality data’.48 The 2019 EIU study notes that ‘S’ factors, in particular, are hardest to quantify, yet is 
currently thought to have the most capacity to drive negative returns in Asia. On the other hand, ‘G’ 
 
43 EIU. Green Intelligence: Asia’s ESG investing, data Integrity and technology. (2019) 
https://eiuperspectives.economist.com/sites/default/files/green_intelligence_eiu_e_fund.pdf  
44 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM 
45 GFMA and BCG. Climate Finance Markets and The Real Economy. (2020)  
https://www.sifma.org/wp-content/uploads/2020/12/Climate-Finance-Markets-and-the-Real-Economy.pdf  
46 ASIFMA. Sustainable Finance in Asia Pacific Regulatory State of play. (2020) https://www.asifma.org/wp-
content/uploads/2020/03/sustainable-finance-in-asia-pacific.pdf 
47 ASIFMA. ASIFMA Response to Consultation of 2020 Green Bond Endorsed Project Catalogue. (2020) 
https://www.asifma.org/wp-content/uploads/2020/06/asifma-response-to-china-2020-green-bond-catalogue-
consultation-final-eng-chn.pdf 
48 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020) 
https://youtu.be/E-SiPlJc8CM

Page 19 
factors are subject to a greater degree of mandatory disclosure, resulting in greater availability of 
useable data. Therefore, there is a mismatch between data availability by factor vis-a-vis which 
factors are weighted highest (E) and/or thought to drive negative returns (S).49 This can manifest in a 
lack of comparable data that is essential to compare different projects (i.e. data is available for one 
project but not another).  
 
Another issue raised in our virtual discussions was the imbalance between data on ESG risk to ESG 
return. Increasingly, the investment community holds the view that equitable business and 
investment practices, coupled with good risk management, may be intrinsically linked with long-
term profit returns. The imbalance in ESG risk-to-return data poses to be an ongoing challenge as 
firms increasingly want to assess the upside social return of investments, whereas the historical 
emphasis in ESG evaluation has been on downside risk.50  
 
Reliability of Third Parties 
The 2020 EIU report notes that third-party data from vendors can be problematic, starting with 
reliance on a single data source often resulting in volatile indicators over time. In addition, data from 
some vendors can be more accurate or reliable than others. Another source of error lies in the 
compatibility between the vendor’s methodology and metrics, and what the investor is trying to 
monitor. At times there is limited clarity on methodologies underpinning ratings.  In our virtual event 
discussion, one of the speakers spoke of the trade-off between data quality, sector coverage, and 
specificity within sectors and geographies.51 There is an imperative for investment decision makers 
to ensure they understand the implications of ESG ratings and data employed in the investment 
process.  Greenwashing can occur when in accurate data from ESG rating firms is used by asset 
managers to make “green” investment decisions.  
 
The EIU notes that whilst credit rating agencies are regulated, ESG ratings agencies are not. To 
overcome some of the reliability issues, some investors have started to create their own in-house 
ESG scores, an avenue mostly only open to larger investors.52 The EU has introduced requirements 
that impose transparency and disclosure requirements on financial products through EU benchmark 
regulations Sustainable Finance Disclosure Regulation (SFDR). Some commentators anticipate Asia’s 
regulators considering similar approaches.  
 
Forward- vs Backward-looking Perspectives  
A fundamental issue is the fact that current data is backward-looking (e.g. existing or past 
environmental impact), with limitations at play when historical data is used to predict future factors. 
However, according to the 2019 report by EIU, more predictive and forward-looking data is 
becoming available, such as supply-chain factors and other lead indicators.53 
 
 
 
 
49 EIU. Green Intelligence: Asia’s ESG investing, data Integrity and technology. (2019) 
https://eiuperspectives.economist.com/sites/default/files/green_intelligence_eiu_e_fund.pdf  
50 ASIFMA/FOSDA. Virtual Event: Navigating ESG and Sustainable Finance in Asia. (2020)  
https://youtu.be/E-SiPlJc8CM 
51 Ibid. 
52 EIU. Sustainable and actionable: An ESG study of climate and social challenges for Asia. (2020) 
https://perspectives.eiu.com/sites/default/files/sustainable_and_actionable_report_2.pdf 
53 EIU. Green Intelligence: Asia’s ESG investing, data Integrity and technology. (2019) 
https://eiuperspectives.economist.com/sites/default/files/green_intelligence_eiu_e_fund.pdf

Page 20 
Accessibility and Interpretability 
Given the complexity of ESG data, interpreting it for research and analytical purposes can be 
particularly challenging. Some commentators have noted that much data exists in unstructured form 
(for example, information gleaned from site visits, or even those methodically recorded in call 
reports), while public and government data sources obtained through regulatory disclosure 
requirements are often incomplete and disorganised. The 2019 EIU study further notes that data to 
support interpretation of ‘S’ factors in particular was the most difficult to obtain. To that end, 
investors and firms are looking increasingly for commercial advantages, and of the 300 respondents 
surveyed by EIU, a vast majority said they were using artificial intelligence (AI) either always or often 
to improve ESG analysis and increase efficiency by helping to consolidate data and analyse 
unstructured and structured data in meaningful ways.54 
 
According to the study, 85% of asset and wealth management firms use AI always or often, 
compared to 65% of investment banks, (re)insurance companies and global financial firms, while 
number of analytics firms are now offering a range of AI tools.55 Fintech companies are also seeking 
new ways to correct inefficiencies in government data sources through the use of AI technology. In 
fact, commentators during the virtual events noted that large potential in the use of AI software 
tailored for data analysis and collection to alleviate these issues.56 
 
Interoperability with Financial Risk Assessment 
The EIU notes that while credit rating agencies assess the material impact ESG factors may have on 
probability of default, ESG scores may profile an issuer, and not an individual issue, and do not 
necessarily capture the financial implications of factors such as credit risk exposure to ESG factors.57 
There is a need for harmonisation and interoperability between ESG standards, green finance and 
climate-risk management standards to which financial institutions are increasingly being held.58 
 
Commentators during the virtual events elaborated on the potential of alternative data sources and 
emerging technologies that could assist credit institutions with risk assessment. For example, drones 
and geo-mapping technologies are currently being used to assess natural environmental risks to 
relevant assets. This could assist asset managers and insurers in their assessment of a client’s asset 
risk before making transaction decisions. Consideration of such technologies may be particularly 
relevant to the insurance sector as losses to insurance companies have recently hit $150 billion per 
annum, much of which could be linked to the impact of climate change.59 
 
 
 
 
54 Green Intelligence: Asia’s ESG investing, data integrity and technology. (2019) 
https://perspectives.eiu.com/sites/default/files/green_intelligence_eiu_e_fund.pdf 
55 Ibid. 
56 ASIFMA. Virtual Event: ESG and Sustainable Finance in Asia: the Fintech and Data Challenge. (2020) 
https://www.youtube.com/watch?v=TSbDcd-mfQI&feature=youtu.be 
57 Sustainable and actionable: An ESG study of climate and social challenges for Asia. (2020) 
https://perspectives.eiu.com/sites/default/files/sustainable_and_actionable_report_2.pdf 
58 ASIFMA. Sustainable Finance in Asia Pacific Regulatory State of play. (2020) https://www.asifma.org/wp-
content/uploads/2020/03/sustainable-finance-in-asia-pacific.pdf 
59 ASIFMA. Virtual Event: ESG and Sustainable Finance in Asia: the Fintech and Data Challenge. (2020) 
https://www.youtube.com/watch?v=TSbDcd-mfQI&feature=youtu.be

Page 21 
In a response to the MAS’s consultation on environmental risk management for banks, ASIFMA 
noted data challenges that would benefit from further supervisory guidance, including the need for 
standardised environmental and climate related data (or minimum standards) that banks should 
require corporate clients to disclose (including data from corporate clients), environmental and 
climate related metrics that banks should look towards assessing and in turn, what banks would be 
required to disclose, and benchmarks for environmental risks and key climate scenarios which could 
be used for risk management purposes.60 In addition, further tools and guidance on scenario analysis 
would be helpful in enabling financial institutions to better understand this developing requirement 
for risk management. 
 
 
 
60 ASIFMA. ASIFMA Response to The Monetary Authority of Singapore's Consultation Paper on Proposed 
Guidelines on Environmental Risk Management (Banks). (2020) 
https://www.asifma.org/wp-content/uploads/2020/08/asifma-response-to-mas-erm-guidelines-banks-
v20200807-final.pdf

Page 22 
4. Digitalisation & Emerging Technologies 
As identified by the ADB and other global bodies, one important element to drive sustainable 
development and help close gaps in the availability, reliability, and adequacy of ESG data is 
‘digitalisation’61. Indeed, a number of technologies and associated business models are evolving 
rapidly in this area, spanning AI, robotics, 3D printing, big data, blockchain, and the Internet of 
Things (IoT) amongst other solutions, which offer opportunities to rethink how the public and 
private sectors could work together to drive green and sustainable development. 
 
The following section identifies several use cases of technologies and innovation in the field of ESG 
integration and sustainability practices. 
 
Data Collection and Analysis 
Fintech companies are increasingly utilising AI software to compile data in a comprehensive manner 
and remove non-essential information to deliver factual and relevant data to investors. AI 
technology is also used to scan large amounts of government records for evidence of company 
failings such as non-compliance fines, regulatory breaches, non-sustainable practices, and 
cybersecurity violations. This not only helps investors gain a more holistic understanding of investee 
companies, but also increases corporate accountability and transparency, which together helps 
further enable and support the mobilisation of private capital. 
 
Auditing and Monitoring 
Fintech companies have also developed techniques of directly monitoring companies’ operational 
processes and their impacts, such as through geospatial data and heatmapping technologies, that 
allow users to monitor the environmental impacts of manufacturing processes. New technologies 
also allow firms to now measure the carbon concentration levels in a factory’s surroundings and 
allow monitoring of corporate activities using satellite imagery, which may serve as a reliable 
alternative to self-disclosed corporate data. The use of blockchain technology and cryptocurrencies 
may also increase transparency in auditing.62  
 
Risk Management  
Asset managers and insurance companies that often require alternative means of assessing 
environment and weather-related risks may also use emerging technologies in the process of risk 
management. Technologies such as geo-mapping, satellite imagery, drone imagery, and seismic 
detection tools may allow firms to assess risks related to unstable land surrounding assets of areas in 
relation to their proximity to fault lines, asset proximity to beaches and the ocean vis-à-vis risk 
related to rising sea level, and other factors relevant in consideration of certain risky investments.63 
 
Additionally, corporations are increasingly utilising natural language processing technology 
(algorithms that process human language input and convert it into understandable representations) 
to collect sentiment analysis data by employing handwriting recognition technology and voice 
recognition devices. AI recognition of human linguistic communication allows the analysis of 
sentiment towards products and other objects or concerns, allowing companies to predict market 
 
61 United Nations ESCAP. Frontier Technologies for Sustainable Development in Asia and the Pacific. (2020) 
https://www.unescap.org/sites/default/files/publications/Frontier%20tech%20for%20SDG.pdf  
62 ASIFMA. Virtual Event: ESG and Sustainable Finance in Asia: the Fintech and Data Challenge. (2020) 
https://www.youtube.com/watch?v=TSbDcd-mfQI&feature=youtu.be 
63 Ibid.

Page 23 
trends and make corporate financing decisions with regards to product marketing, advertisements, 
and any other expenses.64 
 
Energy Efficiency 
Technologies may be used to integrate ESG principles and sustainable practices into the day-to-day 
conduct of business, which is notably being developed by the property and supply chain sectors 
within their environmentally sustainable practices.65 In recent years, development of energy efficient 
architectural designs, increased use of solar panels, and implementation of smart energy systems 
have all significantly helped lower total carbon output of buildings and urban infrastructure. New 
technologies, such as IoT, are spreading rapidly in use in energy systems, vehicles and transportation 
systems, smart buildings and cities, and manufacturing operations which not only helps cost-cutting 
of total energy use, but also allows companies and organisations to actively monitor and manage 
energy efficiency within their business practices. Similarly, supply chains are now shifting towards 
eco-friendly energy sources in their distribution channels. 
 
Scaling ESG Enabling Technologies 
Asked what is needed most to scale ESG and sustainable finance enabling technologies, nearly half 
of respondents to a 2020 ASIFMA/FOSDA poll prioritise ‘policy and regulation to support innovation’, 
whilst 30% indicated ‘industry-driven efforts and market structures’ are more important. 
 
Figure 3. What is needed most to scale ESG and sustainable finance enabling technologies? (Source: ASIFMA Virtual Poll, 
October 2020) 
 
 
 
With the pace at which new technologies and innovation are being used to narrow data gaps in 
sustainable finance and ESG, the poll result highlights the importance of effective policy and 
regulatory measures supporting innovation, which in turn will help enable the scaling of green and 
sustainable investments. Policymakers and regulators are encouraged to think about innovative 
policy actions that utilise technologies and avoid stifling innovation, and should also be prepared to 
put in place responsive and adaptive regulatory and policy frameworks for the next generation of 
ESG-enabling technologies. In a similar vein, result also suggests that industry-driven efforts, which 
when undertaken by a private sector that pursue responsible technological development with a goal 
to tackle environmental and social concerns, are equally crucial. 
 
64 ASIFMA. Virtual Event: ESG and Sustainable Finance in Asia: the Fintech and Data Challenge. (2020) 
https://www.youtube.com/watch?v=TSbDcd-mfQI&feature=youtu.be 
65 Ibid. 
8%
11%
51%
30%
No intervention
Cash-based interventions
Policy and regulation to support innovation.
Industry-driven efforts and market structures.

Page 24 
5.   Conclusion  
As the private and public sectors plan ahead for post-Covid recovery, we are at a critical juncture to 
identify data gaps and obstacles to scaling ESG and sustainable finance development, and to work 
towards developing and accelerating green recovery strategies. ESG-based performance, both in 
terms of investment inflows and asset performance, has been positive during these troubling times, 
and many regulators and investors have recommitted to sustainable development, with greater 
focus on systemic risks related to climate and social concerns.  
It is therefore important for Asia to focus on the data requirements for supporting ESG to ensure 
data asymmetries do not stall further efforts to developing and scale sustainable finance in the 
region, vis-à-vis other regions such as the EU which are further progress in their ESG and sustainable 
finance agendas and related data standards. 
 
Recommendations  
ASIFMA offers the following 8 key recommendations, critical to supporting and enabling the further 
development of green and sustainable markets in Asia: 
1. A greater convergence towards a principles-based global (or at least regional) taxonomy 
2. Higher, more consistent corporate disclosure standards between jurisdictions and sectors 
3. Encouragement of higher standards of analysis, with incentives for more holistic and robust 
approaches to ESG measurement and analysis 
4. Policy and regulation to support innovation and technologies that enable ESG and 
sustainable finance capabilities 
5. A focus on education and skills to support ESG and sustainable finance capability 
6. Higher standards and accountability for ESG ratings providers, potentially including 
regulation, and clear and harmonised requirements for product disclosure  
7. Harmonisation between ESG standards and frameworks such as UN SDGs, and policy on 
climate change and bank supervision at systemic level, including on climate risk 
8. Ongoing partnership and dialogue between the public and private sectors, as well as 
between stakeholders such companies and investors on disclosure and reporting standards