ASEANSUSTAINABLE
FINANCESTATE OF THE
MARKET 2022

Prepared by Climate Bonds Initiative.

Introduction
About this report

Contents

List of abbreviations

The Association of Southeast Asian Nations(ASEAN) is an economically dynamic andculturally diverse region with a population of
650 million. The region comprises 10 member
countries—Brunei, Cambodia, Indonesia,
Lao People’s Democratic Republic (Lao PDR),
Malaysia, Myanmar, the Philippines, Singapore,
Thailand, and Vietnam—that together make up
the fifth largest economy in the world, set tobecome the fourth largest by 2050.1

Introduction 2

A&R: Adaptation and resilience

1. Report highlights 3

ACMF: ASEAN Capital Markets Forum2. Methodology

ADB: Asian Development Bank

This is the fifth iteration of the Climate Bonds
Initiative’s ASEAN State of the Market reportseries. As the sustainable debt market has
grown, the scope of this report has expanded,and now includes analysis of the green, social,and sustainability (GSS) bond and loan markets,
plus sustainability-linked bonds (SLBs) andsustainability-linked loans (SLLs) and transition
bonds, collectively described as thematic or
GSS+ debt. This report describes the shape andsize of this market originating from ASEAN andpriced on or before 31 December 2022, alongwith related topics (taxonomies, transition, andpolicy) covered in the spotlight sections.

6

3. Market overview

8

AMS: ASEAN Member States

4. Green 11

ASEAN: Association of Southeast Asian Nations

5. Social and sustainability 15

ATB: ASEAN Taxonomy Board

6. Sustainability-linked 16

BNM: Bank Negara Malaysia

7. Spotlight: Taxonomies in ASEAN 18

DNSH: Do no significant harm

8. Spotlight: Transition in ASEAN 22

ESG: Environmental, social, and governance9. Spotlight: Supportive policies to scale
up sustainable finance in ASEAN 26

ETM: Energy Transition Mechanism

10. Appendix: Country analyses 29
11. Endnotes 35

About the Climate Bonds
Initiative
The Climate Bonds Initiative is an international
investor-focused not-for-profit organisation
working to mobilise the USD100tn bond market
for climate change solutions.
It promotes investment in projects and assets
needed for a rapid transition to a low carbon
and climate resilient economy. The mission
is to help drive down the cost of capital forlarge-scale climate and infrastructure projects
and to support governments seeking increased
access to capital markets to meet climate andgreenhouse gas (GHG) emission reduction goals.

GBDB: Green bond database
GFIT: Green Finance Industry
Taskforce (Singapore)
GHG: Greenhouse gas
GSS: Green, social and sustainability
debt instruments
GSS+: GSS, SLBs, SLLs, and transition bonds
ICT: Information communication technology
ITSF: Inter-Agency Technical Working Group for
Sustainable Finance, Philippines
JETP: Just Energy Transition Partnership
KPI: Key performance indicator
MAS: Monetary Authority of Singapore
SC: Securities Commission Malaysia
SDG: Sustainable Development Goal
SLB: Sustainability-linked bond
SLBS: ASEAN Sustainability-Linked
Bond Standards
SLL: Sustainability-linked loan
SPO: Second Party Opinion
SPT: Sustainability performance target
SRI: Sustainable and Responsible Investment
S&S: Social and sustainability
UoP: Use of proceeds
WC-CMD: ASEAN Working Committee on CapitalMarket Development
WG-SF: Working Group on Sustainable
Finance, Thailand
YOY: Year-on-year

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative2

Report highlights
Market contracts in 2022, butmany positives remain
Following a very strong 2021,
and reflecting adverse market
conditions – namely rising
inflation and interest rates – thatnegatively impacted global
capital markets activity, the ASEAN sustainablefinance market contracted in 2022 for the firsttime ever (-32% YOY). However, volumes stayedrobust at USD36bn, almost twice the level of 2020.
Issuance was lower across most market
segments in 2022, albeit to varying degrees.
Green bonds and green loans fell the leastat -26%, whereas SLBs plunged almost 90%
and SLLs 40% after ‘exploding’ in 2021.
The exceptions were green Sukuk and social bonds
which both achieved record volumes. Despite this,social bond issuances remain sparse, with only one
deal issued by Thailand’s Government Savings
Bank (THB10bn/USD295m) during the year.

Loans remain the most popular debt
instruments in the region, with SLLs
comfortably at the top and green loans exceeding
green bonds/Sukuk.
The overall number of issuers dropped from 103
in 2021 to 64 in 2022. This is close to the levelof 2020 (61) but with almost twice the amountissued, reflecting a larger average amountper issuer driven by more benchmark deals,
including from sovereign issuances.

Singapore tops mostmarket segments
No new issuer domiciles
were added in 2022. The
group of ASEAN-6 covered inprevious reports remains thesame among GSS (i.e., thematic
UoP) instruments, while
Cambodia and Myanmar have seen small SLLtransactions but none in 2022.

Singapore remains the clear leader and mostdeveloped market overall in the region both
cumulatively and in 2022, despite issuance
dropping considerably in 2022 (-45% YOY) in linewith most of the world. The country accounts
for 63% of cumulative ASEAN issuance, slightly
above the 60% in 2022. Singapore is top acrossthe green, SLL and SLB segments.
Driven by its sovereign sustainability issuances,
Thailand is strongest cumulatively among social andsustainability bonds. Nevertheless, the Philippines’
inaugural sustainability sovereign in 2022 earned thenation first place during the year in this theme.

Sovereigns stay strong;
Singapore and Philippines enter
Sovereign issuances
remained relatively robustin 2022, showing the mostresilience of all issuer types
in the region.

Market analysis summary: SLLs, green and sustainability segments dominate
Green*

SocialSustainability

SLB

SLL**

2022

Cumulative

2022

Cumulative

2022

Cumulative

2022

Cumulative

2022

Cumulative

Amount issued(USDbn)

12.8

50.6

0.3

0.9

7.8

22.6

0.3

2.7

14.9

52.0

Number of issuers

24

117

1

7

11

29

2

10

27

77

Average amountper issuer (USDm)

535

432

295

129

705

780

136

265

552

675

Number ofcurrencies

8

13

1

2

5

7

3

5

4

8

Number ofcountries

5

6

1

2

3

6

2

4

5

8

Largest country(by amountissued)2022: Singapore

2022: Thailand

2022: Philippines

2022: Singapore

2022: Singapore

Cumulative: Singapore

Cumulative: Thailand

Cumulative: Thailand

Cumulative: Singapore

Cumulative: Singapore

Largest issuer

2022: Perennial
Shenton Property Pte
Ltd (USD2.1bn)

2022: Government
Savings Bank Thailand (USD295m)

2022: Thailand
Government(USD2.7bn)

2022: Ascott REIT MTN
Pte Ltd (USD259m)

2022: OlamInternational Ltd(USD4.9bn)

Cumulative:
Republic of Indonesia(USD5.5bn)

Cumulative: National
Housing Authority Thailand (USD314m)

Cumulative:
Thailand Government(USD7.7bn)

2022: Perennial
Shenton Property Pte
Ltd (USD2.1bn)

2022: Government
Savings Bank Thailand (USD295m)

2022: Thailand
Government(USD1.6bn)***Cumulative:
Perennial Shenton
Property Pte Ltd(USD2.1bn)

Cumulative:
Government Savings
Bank - Thailand(USD295m)

Cumulative:
Thailand Government(USD6.8bn)

Largest deal

Cumulative:
Sembcorp Financial
Services Pte Ltd(USD497m)
2022: Ascott REIT MTN
Pte Ltd (USD147m)
Cumulative:
Sembcorp Financial
Services PTE Ltd(USD497m)

Cumulative: OlamInternational Ltd(USD9.9bn)****
2022: OlamInternational Ltd(USD2.9bn)
Cumulative:
Trafigura Group Pte
Ltd (USD5.5bn)

NB: Figures in USD equivalent only. Cumulative means the total cumulative amount (since the first deal/market inception, e.g., 2016 for green bonds). Countries refer to issuer domiciles.
*Includes green bonds, loans and Sukuk. Most green loans from 2022 are based on Refinitiv data but have not yet been screened for inclusion in the Climate Bonds Green Bond Database (most if not all are likely to be
included). **SLL data is from Refinitiv as Climate Bonds does not track this segment (yet). ***Most of the Thai sustainability sovereign is from a tap of its original 2020 deal (12 taps in total, of which three in 2022). Excluding
it, the largest deal from 2022 is BDO Unibank’s (USD1bn). ****Second largest SLL issuer is Trafigura Pte Ltd, also from Singapore (USD7.9bn).

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative3

Singapore and the Philippines became two newsovereign issuers (of green and sustainability
bonds respectively), adding to the alreadysignificant volume of ASEAN sovereign debt. In theface of adverse market conditions, governments
tend to be the least likely issuer type to beaffected, especially when neighbouring or peer
countries show leadership in the market – thistrend seems to be present in the ASEAN region.
This is a very positive sign given the importanceof sovereign transactions, both in stimulating
market activity and development as well as inallocating large amounts of capital to sustainableprojects and activities. The two regions globallywith the highest share of sovereign issuance are
ASEAN and Latin America, a feature which has
persisted for a few years now.
Sovereign issuance in ASEAN is concentrated insustainability bonds, which enable governments
to raise funds for a combination of green andsocial projects. Thailand (2020, tapped in 2021
and 2022), the Philippines (2022), Malaysia (2021)
and Indonesia (2021) make up the list. Sovereign
green debt has only been issued by Indonesia(every year since 2018) and Singapore (2022),
the latter being an important milestone for theregion’s thematic finance market.
Corporate issuance fell drastically in 2022,
especially in the green theme. This is instark contrast to the cumulative figures and ourprevious report, where corporates dominatedgreen volumes. Interestingly, non-financials
have dominated corporate green bonds, while
corporate sustainability bonds in the region haveprimarily been issued by financial institutions.

Currency use varies by theme
and country
In the green theme,
2022 saw increased
denomination in local
currencies at the expense offoreign ones. Barely any USD
green debt was issued during
the year in Singapore, by far the region’s largest
market. Only 20% of the 2022 green volume
was issued in foreign (hard) currencies, versus
33% cumulatively. The vast majority of foreign
denomination is in USD, which accounted for
17% of the 2022 volume and 28% overall.
An increasing share of local currency
denomination is generally a positive sign,
suggesting that domestic markets are becoming
more developed and local/regional investors
are playing a larger role. One of the objectivesof governments, MDBs and organisations like
Climate Bonds is precisely to help grow large,
liquid thematic capital markets with participationfrom local investors, and the ASEAN green
bond market clearly seems to be moving inthat direction (although differences by country
persist, of course).

In line with its relative size, the ASEAN S&S
market shows less currency diversificationand more broadly less maturity than its green
counterpart. This includes the use of fewer local
and foreign currencies, the latter being highly
concentrated in USD looking at number of deals,
but less so looking at amount issued.
The main reason for the USD’s lower share byamount issued is that most of the Philippines’ 2022
sovereign deals came in JPY, a new currency for theregion’s S&S market. This follows on from the JPY/PHP currency swap facility under the cross-border
liquidity arrangement between the Philippines’
Bangko Sentral and the Bank of Japan, and islikely a result of the Philippine Government trying
to increase its investor appetite and base throughhard currency denomination.2 Its other, andlarger, sustainability bonds were issued in USD.
The currency analysis among SLLs and SLBs
shows a high share of USD denominationand fewer currencies used versus green
debt instruments, despite the market beingslightly larger. The SGD is comfortably in second
place among SLLs given Singapore’s large market,
but the USD still dominates heavily in the country;
this contrasts with green debt issuance, where SGD
reigns supreme. Part of this could be related tothe profile of issuers accessing each market, witha higher share of local and smaller issuers amonggreen debt instruments versus larger international
ones among SLLs. Nevertheless, the difference isstill larger than expected and Climate Bonds willcontinue to monitor this trend.

Increasing deal sizes and longer
tenors in 2022
A considerably higher
share of deals in 2022
were benchmark-sized(USD500m+). This was driven
by several deals over USD1bn,
including from sovereigns(Indonesia, Thailand, Singapore), financial
corporates (e.g., BDO Unibank) and non-financials
from the real estate sector (e.g., Asia Square Tower).
Sovereigns are generally less sensitive in the faceof increasing interest rates. On the corporateside, the relative ‘stickiness’ of larger deals could
be due to them being less flexible than smaller
deals (e.g., planned/decided for longer), evenas rates rise. Although hard to be sure, the datashows some support to this, as larger deals were
distributed throughout the year while smaller
ones were relatively more concentrated in thefirst half of the year.
By contrast, a much lower share of 2022 versus
cumulative issuance came through small deals.
This may be a reflection of adverse market
conditions, which potentially impacted smaller
issuers more and prevented some from coming
to market. This trend is more visible among green
debt than any other theme.

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

Relatively short tenors are common in ASEAN
across all themes, which may be linked to thehigh share of loans in the region. However,green bonds, green Sukuk and S&S bonds
saw more long-dated deals in 2022, which
pushed up the average tenor. This may again
reflect adverse and volatile market conditions,with issuers anticipating rising inflation and arecession in the near term. This may cause someto favour longer dated projects/instruments
and/or refrain from issuing shorter term debt
while waiting for more favourable interest
rates. Yield curves in ASEAN countries were notinverted (like with US Treasury bonds) but did
show some flattening versus the previous year.

Active year for policy andmarket development initiatives
While issuance volumes
were generally lower
versus 2021, many relevant
policies and initiatives
were announced and/or
implemented during 2022.
These complement frequent sovereign issuances
which have become the norm in ASEAN and set avery promising tone for the future of sustainablefinance in the region. They indicate a high levelof interest from governments in the region todevelop the market.
Although most are national measures, some spanthe entire region, the latter mainly led by the
ASEAN Capital Markets Forum (ACMF). A full andmuch longer list with more detailed discussion isprovided in the spotlight sections of this report,
but to highlight a few:
• Continued taxonomy
development, including
stakeholder engagement andconsultation of the ASEAN
Taxonomy Version 1 following
its publication in late 2021 (a Version 2 hasalready been released in 2023), as well as
the launch of taxonomies in Indonesia andMalaysia and taxonomies in Singapore andThailand released for public consultation:these aim to bring more clarity and consistency
to definitions of green/sustainable/transition
activities, facilitating capital flows andsupporting private and public investments intosuch projects. This should enable the credible
growth of thematic finance. Looking ahead,policymakers should ensure technical criteria
are science-based and tightened over time.
• Enhanced building blocks
for credible transition
finance: entities operating inmany sectors must undergo amajor transformation to reachnet-zero GHG emissions by 2050. A key tool
to enable this is the creation of a robusttransition plan that is science-based, coherent,4comprehensive, transparent, and covers allmaterial scopes of emissions and businessactivities. This allows organisations to plan
their transition path and evaluate progress overtime, communicate their plan to the market/
investors while reducing or even eliminating
greenwashing risks, and structure their financeaccordingly (for example via sustainabilitylinked instruments).
Transition plans are currently not mandatory
in ASEAN, and very few companies haveset one that meets the characteristics inthe previous paragraph. In line with otherregions (namely the UK and EU), ASEAN
governments and regulators can and should
work to introduce requirements for mandatorytransition plans. The building blocks now exist,
particularly given the broader developmentof sustainability reporting globally (see page28), introduction of reporting rules, tools andplatforms by some ASEAN stock exchanges,
continued taxonomy development (including
on transitional activities, e.g., in Singapore),and recent publication of the ASEAN SLBS. The
time is ripe to grow transition finance, and toaccelerate the transition.

• ASEAN SLB Standards (SLBS)
published by the ACMF, basedon ICMA’s SLBP: these are
expected to support SLB issuanceacross a broader issuer basewhile ensuring sufficient consistency instructures and transparency. This willcomplement the ASEAN standards for GSS
instruments and help to develop a morerobust, credible and standardised market ofsustainability-linked instruments.
• There does not seem to be a plan foran equivalent standard for SLLs. Thismay be more challenging but could be aworthwhile goal given the size of this market
in ASEAN and the fact that loan markets are
generally more opaque in their disclosure / itis generally harder to ensure adequate levelsof transparency among SLLs. However, theSLBS can already provide much support to
SLL issuers in the region.

• Singapore: launch of the ESG
Impact Hub and ESGenome
Disclosure Portal, new listing
rules requiring all SGX-listed
entities to provide climate
reporting on a ‘comply or explain’ basis, andestablishment of Sustainable Finance Advisory
Panel by the MAS.
• Malaysia: release of the revised
Sustainability Reporting Guide,publication of the Climate Data
Catalogue and expansion of
the SRI Sukuk and Bond Grant
Scheme for performance-linked instruments.
• Thailand: release of
Sustainability Reporting Guide
and Guidelines on Management
and Disclosure of Climate-related
Risk by Asset Managers.
• Indonesia: introductionof carbon tax, launch of Energy
Transition Mechanism (ETM)
Country Platform by the Ministryof Finance, and launch of Just
Energy Transition Partnership (JETP)
at G20 Summit.
• Philippines: launch of Rules
on Sustainable & Responsible
Investment Funds and releaseof the Sustainable Central
Banking Strategy.
• Vietnam: launch of Just Energy
Transition Partnership (JETP),
which will mobilise an initial
USD15.5bn to support thecountry’s green transition, andapproval of 2022-2025 government programme
for sustainable business development.

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative5

Methodology
Scope and structure of analysis
The analysis in this reportis largely based on the
instruments and data tracked
by Climate Bonds. It includes
the following thematic debt
themes: green, social, andsustainability (GSS) UoP bonds/loans/Sukuk,
along with general-purpose SLBs and SLLs.
Transition (UoP) bonds are also included intheory, but in practice there has only been one
from ASEAN (from 2021) and its post-issuancereport shows that it only financed natural gas
projects; it has thus been excluded from theanalysis given fossil fuel investments (outside ofmanaged phase-out/plant decommissioning) are
not aligned with Climate Bonds’ eligibility criteria(see page 8).
The collection of the above is referred to as
the GSS+ market. A related market is that of
unlabelled climate-aligned bonds, a segment
which Climate Bonds also tracks (more details
below). However, the results remain very similar
to those covered in last year’s report (link here)
and were not included this time.3
Climate Bonds has historically focused on thegreen theme through the Green Bond Database(GBDB), which includes not only bonds but
also other instruments such as loans, Sukukand asset-backed securities (ABS). We note thatmany green loans from 2022 have not yet been
screened for inclusion in the database, but mostare likely to be included based on previous
experience. In addition, due to the importance ofloans in ASEAN and their different characteristics
as debt instruments (see below), loans are shown
separately to bonds (and Sukuk) in some parts of
the analysis.
The database expansion to other themes (S&S
bonds, transition bonds, and SLBs) is more
recent, enabling a broader view of the thematic
debt market which is increasingly reflectedin our research and reports. However, only
bonds – not loans – are included across these
themes. It is also important to note that while
GSS instruments are screened as part of therespective methodology requirements, SLBs andtransition bonds are not yet screened against any
methodology (e.g., to assess the ambition andmateriality of targets).

generally have more opaque disclosure given
they tend to be privately (often bilaterally)
arranged. This means it is often hard to a) findrelevant deals, and b) find essential information
about the deals, including details such as loan
amount and term, as well as use of proceeds.

Methodology overview

Climate Bonds tracks green loans within the
Climate Bonds Green Bond Database (GBDB),
but with the caveat that this data is collected ona best-efforts basis (unlike green bonds, where
the confidence level is higher) and deals may
take longer to be added to the database. Greenloan figures included in this report are therefore
indicative and should be treated as such. They
have been included in this report provisionallygiven that most or even all are likely to be
included following screening. For similar reasons,
SLL data should also be treated as indicative.

1. Green Bond Database (GBDB)GSS+ market
GSS debt instruments
Green: dedicated environmental benefits (green
bonds, loans, Sukuk, etc., together referred to as
green debt: captured in the GBDB since 2012).
Social: dedicated social benefits (social bonds:
captured in the S&S Database since 2020).
Sustainability: green and social benefits
combined into one instrument (sustainability
bonds: captured in the S&S Database since 2020).

Transition debt instruments
SLBs: coupon step-ups/step-downs linked toentity-level sustainability performance targets(SPTs) (captured in the SLB and Transition Bond
Database since 2021).
SLLs: rate step-ups/step-downs linked to entitylevel SPTs (not yet tracked by Climate Bonds).
Transition bonds: use of proceeds (UoP)
supporting transition at activity or entity level(captured in the SLB and Transition Bond
Database since 2021).

Climate-aligned issuers/bonds
Unlabelled bonds from climate-aligned issuers
finance climate-aligned projects, assets, andexpenditures, but are not labelled by issuers(captured in the Unlabelled Climate-Aligned
Issuer Database since 2012).

Finally, SLLs are not yet tracked by Climate
Bonds. The SLL data covered in this report is from
Refinitiv and, like with SLBs, the deals have notbeen screened.

Reduced loan disclosure
Loans are debt instruments that differ frombonds. One important difference, particularlyin the sustainable finance market, is that loans

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

This report is largely based on the following
three Climate Bonds’ databases, with only SLLs
and some 2022 green loans based on external(Refinitiv) data:

2. Social and Sustainability (S&S) Bond Database
3. SLB and Transition Bond Database

Minimum requirements for inclusion
Apart from the climate-aligned database (seebelow), debt instruments must have a label toqualify for inclusion. Debt labels describe thetypes of projects, activities, or expenditures
financed, and/or their benefits.
Green, social, sustainability, and transition debt
must finance sustainable projects, activities,
or expenditures. Green, social, sustainability,
and transition are the most common labels
respectively among these instruments, but abroad range is used. Among performance-linked
instruments, SLBs/SLLs must annunciate clear
SPTs for the entity.

Green
All deals in the green theme
have been screened to verify
their integrity. Screening isbased on a set of process rules
stipulated in Climate Bonds’
GBDB Methodology, including the following two
overarching criteria:4
1. Deals must carry a variant of the green label.
2. All net proceeds must verifiably (public
disclosure) meet Climate Bonds’ green
definitions derived from the Climate Bonds
Taxonomy.5 All green debt instruments arereviewed to ensure their green credentials.

Social and sustainability
Social and sustainability (S&S) deals are classified
based on the UoP (which is typically related tothe deal’s label), as follows:
Sustainability: UoP includes
a combination of green andsocial projects, activities, or
expenditures, e.g., renewableenergy, low-carbon transport,
employment generation andgender equality.
Social: UoP is exclusively
related to social projects,
e.g., health, employment,
gender equality, affordable
housing, etc.

6

Any instrument financing only green projects is
included in the GBDB should it meet eligibility
requirements, irrespective of its label (e.g., an
SDG bond that only finances solar energy). A
sustainability-labelled bond that only finances
social projects will fall under a social theme,
whereas one that finances a combination ofgreen and social would be considered to fallunder the sustainability theme.

Sustainability-linked
bonds and loans (SLBs and
SLLs)
SLBs and SLLs raise general
purpose finance and involve
penalties/rewards (e.g., coupon
or rate step-ups/ step-downs, early repayment
obligations, etc.) linked to not meeting/meeting
pre-defined, time bound SPTs and associated
Key Performance Indicators (KPIs), typically at theentity level.
Climate Bonds records but does not yet screen
SLBs or SLLs against thresholds or targets.
Screening methodologies for these debt products
are under development.

Transition bonds
Transition debt includes
instruments financing
activities that are not low
or zero emission (i.e., notgreen), but have a short- or
long-term role to play in decarbonising anactivity or supporting an issuer in its transition
to Paris Agreement alignment. The SLBs andSLLs described above can lend themselves wellto this purpose when calibrated appropriately.
In addition, the market has seen the emergenceof transition UoP bonds, which are intended
to enable the inclusion of a more diverse set of
sectors and activities. This segment currently
includes labels such as transition (the mostcommon), energy transition, blue transition, andgreen transition.
At present, transition bonds predominantly
originate from highly polluting, hard- andexpensive-to-abate industries. These often do
not fall into the existing definitions of green but
are a critical component of a transition to net
zero. Example sectors include extractives such as
mining; materials such as steel and cement; andtransport, including aviation and shipping.
Climate Bonds records but does not yet screentransition bonds against thresholds or targets.
As relevant criteria at both activity- (sector) andentity-levels are developed, Climate Bonds
will introduce screening for bonds and issuersin those sectors. Climate Bonds is currently
developing criteria for the cement, basic
chemicals, and steel industries, along withhydrogen as a cross-industry solution.

Unlabelled climate-aligned bonds
Climate-aligned bonds are not self- nor externallylabelled, and their UoP is not earmarked or
ring-fenced. Nonetheless, these general-purpose
bonds finance climate-aligned projects, assets,
and expenditures. This financing is defined at theentity level based on the share of green revenuesof an issuer.
Climate Bonds’ research on these issuerscovers both public and private companies.
A more detailed methodology is available in
Climate Bonds’ Climate-Aligned Investment
Opportunities: Climate Aligned Bonds andIssuers 2020 report.6
Climate Bonds has been researching bonds
financing climate-aligned assets since 2012, toidentify opportunities in the unlabelled bondmarket, and drive investments towards green
assets and technologies. Because they are notlabelled as green, climate-aligned bonds often
lack the visibility and transparency inherent
in green bonds that typically come with aframework detailing the relevant assets, projects,
or expenditures being financed. Identifying
these bonds highlights opportunities to scale
up the labelled green bond market; for example,
as climate-aligned debt rolls off, it could be
refinanced with a green label. The green label
could achieve cheaper funding for the issuer andenable its inclusion in dedicated mandates. This
research also offers an entity level assessment byidentifying the share of revenues linked to green
activities for bond issuers included in the scopeof the analysis.
Climate-aligned issuers: issuers that derive atleast 75% of their revenues from climate-aligned
business activities. These comprise:• Fully-aligned issuers: issuers that derive ≥95% of revenue from climate-aligned activities.
• Strongly-aligned issuers: issuers thatderive ≥ 75% of revenue from climate-aligned
activities.
Unlabelled climate-aligned bonds: bondsthat finance climate-aligned activities but are notlabelled by the issuer, pro-rated according to therevenue alignment above.
Climate-aligned outstanding debt:
outstanding volume issued by fully-aligned +strongly-aligned issuers.
Labelled bonds are not included in the unlabelledclimate aligned research due to differences informat and to avoid double counting.
NB: Throughout the report, ‘cumulative’ means thetotal amount since market inception in ASEAN (i.e.,
the first deal, for example 2016 for green bonds).

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

7

Market overview

80

SLL

Number of issuers (RHS)

30

60

20

40

10

20

0

0
2018

2019

2020

2021

Number of issuers

SocialSLB

2022
Source: Climate Bonds Initiative

NB: In yearly charts only 2017 to 2022 is shown due to very small size of 2016 and 2015, but all years areincluded in total data/charts. Social and Sustainability (S&S) bonds are separated in the first chart but
grouped in most of the remaining analysis since there have been very few social bonds in the region andsocial bonds share many similarities with sustainability bonds.
SLLs) have emerged as the preferred mechanism
to finance entity-level transitions. While there isincreasing guidance on transition finance – e.g.,
from Climate Bonds and ICMA – the transition
label for UoP instruments thus remains rare, and
it is unlikely that this will change significantly, atleast in the near future. Nevertheless, transition
bonds are a possible instrument that companies
can consider, as long as relevant transition
finance principles are followed.

transition activities (apart from managed phaseout/plant decommissioning) to avoid lock-inof related assets. The deal is thus not includedin the figures of this report, although it would
represent a very small share anyway.

Singapore represents 63% of
cumulative volume, 60% of 2022
Country-wise, Singapore remains the clear leader
in the region both cumulatively and in 2022, but
saw issuance drop considerably in 2022 (-45% YOY).
Thailand (#2) experienced a similar trend (-33%),
while sustainable debt issuance in Indonesia(#3, +66%) and the Philippines (#4, +347%)
grew markedly in 2022. This was largely due torobust sovereign issuance in Indonesia and thePhilippines, but also because the markets are still
relatively small and significant fluctuations are to
be expected when this is the case. Yearly variations
become more meaningful as markets mature.

The only transition bond from ASEAN is the
CNY2bn (USD310m) two-year deal issued by
China Construction Bank’s Singapore branch in
2021. According to its post-issuance report, theproceeds have been fully allocated to natural
gas projects (distributed energy generation,cogeneration and trigeneration) despite several
other projects having been listed as eligible atissuance in its framework.7 Climate Bonds does
not consider fossil fuel investments as eligible

Singapore remains leader but several other countries saw increases in 2022
40

30

2016

2017

2018

2020

2021

2022

2019

20

10

am
et
n
Vi

nd
la
ai
Th

or
e
ng
ap
Si

ili

pp
in

es

ar
Ph

m
M
ya
n

a
si
ay

es

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

M
al

ia

0

do
n

Like in the rest of the world, transition bonds arerare in ASEAN. This is likely a result of the lack ofa widespread ‘transition taxonomy’ which can beused to qualify eligible investments, and the factthat performance-linked instruments (SLBs andGreen Sukuk
Sustainability

In

The overall number of issuers dropped from 103
in 2021 to 64 in 2022. This is close to the level of2020 (61), but the total amount is almost double,reflecting a larger average amount per issuer.
Indeed, this trend holds against other years, with
ASEAN issuers on average raising more in 2022
(USD563m) than any other period. Part of this is dueto the changing profile of issuer types, as sovereigns(i.e., larger issuers) increasingly access the market.

40aSukuk, along with bonds and loans, aredisaggregated in some parts of the analysis
for the green theme. Other themes have also
had Sukuk issuances, but a) in our more recent
S&S database we do not yet track loans nor do
we classify instrument types such as Sukuk,b) among SLBs we do differentiate Sukuk but
there have not been many (under 10% of SLB
volume in ASEAN), the profile was largely similar
to ‘regular’ SLBs, and the SLB market is muchsmaller than the green debt market.

100

di

We note that the SLLs included in this report havenot been screened since Climate Bonds does
not yet track this market, and most green loans
from 2022 have not yet been screened against
the Climate Bonds GBDB, although almost all
are likely to be included upon screening (seeMethodology section for more details). Loan
figures should therefore be treated as indicative.

Green loanboDriven by adverse market conditions, theremaining segments saw issuance drop, albeit tovarying degrees. Green bonds and green loans fell
the least at -26%, whereas SLBs plunged almost
90% and SLLs 40% after ‘exploding’ in 2021. Loansremain the most popular debt instruments in theregion, with SLLs comfortably at the top.

Green bond

2017

USD Billions

Issuance was lower across the various market
segments, with the exception of green Sukukand social bonds which both had record years
in terms of amount issued; even so, social bondissuance remains sparse with only one deal
issued by Thailand’s Government Savings Bank(THB10bn/USD295m).

USD Billions

GSS+

50

m

Following a very strong 2021,
and reflecting adverse market
conditions (namely rising
inflation and interest rates)that negatively impacted
global capital markets
activity, the ASEAN sustainable finance market
contracted in 2022 for the first time ever (-32%
YOY). However, volumes stayed robust at
USD36bn, almost twice the level of 2020.

Only green Sukuk and social bonds grew in 2022; loans remain very common

Ca

The ASEAN GSS+ market

Source: Climate Bonds Initiative8

No new countries were added in 2022. The
group of ASEAN-6 covered in previous reports
remain the same among GSS (i.e., thematic
UoP) instruments. Myanmar and Cambodia areby far the smallest markets with only minor SLL
issuance in 2020 and no GSS deals yet.

Low share of corporates in green bond issuance in 2022 versus
cumulative level; S&S and green Sukuk dominated by sovereigns
Non-Financial Corporate
Development BankGreen bonds show the most varied profile
cumulatively, closely followed by thesustainability bond market. This is in line withthe rest of the world and highlights the wideaccessibility of the use-of-proceeds format
across issuer types. Interestingly, however,corporate sustainability bonds in ASEAN
have primarily been issued by financial
institutions, while non-financials dominate
corporate green bonds.
Corporate issuance fell drastically in 2022,
especially in the green theme. This is in stark
contrast to the cumulative figures and ourprevious report, where corporates dominatedgreen volumes.
Sovereign issuance is concentrated insustainability bonds, which enable governments
to raise funds for a combination of green andsocial projects. Thailand (2020, tapped in 2021
and 2022), the Philippines (2022), Malaysia (2021)
and Indonesia (2021) make up the list.

Cumulative
Cumulative

15

2022

10
5

Cumulative

2022

2022

2022

Cumulative

2022

0Green bondGreen loan

2022

Green Sukuk

Social &Sustainability

SLB

SLL

Source: Climate Bonds Initiative

NB: Loans and Sukuk can also exist for other themes (not just green) but not disaggregated; refer
to methodology for explanation. SLL only for 2022 in this and subsequent charts given lack ofcomprehensive/consistent data, but issuer type profile unlikely to differ significantly in other years.

Benchmark deals gain sharein 2022

COVID-19 pandemic. Development agencies
in ASEAN, both national and regional, could
provide further support to the market throughtheir own financing.
In a similar vein, local/municipal governmentsfrom ASEAN countries have yet to access thethematic debt market, although their ability
to access capital markets may differ between
countries. Sovereign issuance is clearly preferredin ASEAN and often the first route for public
sector issuance, especially in emerging markets.

Deal sizes show less variation by theme/instrument
than issuer types and tenors, with a relatively evensplit looking at cumulative volumes.
2022 brought some change, however, as aconsiderably higher share of deals were benchmarksized (USD500m+). This included several deals over
USD1bn, including sovereigns (Indonesia, Thailand,
Singapore), financial corporates (e.g., BDO
Unibank) and non-financials from the real estate
sector (e.g., Asia Square Tower).

Increasing deal sizes: relatively high share of benchmark sizeand low share of under USD100m deals in 2022
Up to 100m

100-500m

500m-1bn

1bn or more

Cumulative

25

Sovereign green debt has only been issued byIndonesia (every year since 2018) and Singapore(2022), the latter being an important milestone
for the region’s thematic finance market. Driven
by Indonesia’s deals, Sukuk is the preferred
instrument type for sovereign green bonds –Indonesia won the Climate Bonds Award forLargest Green Sukuk in 2022 (USD1.5bn).

Cumulative

20
Cumulative
15

2022

10
USD Billions

There has been very little issuance fromdevelopment banks in ASEAN compared to
the rest of the world, both versus regional
institutions (such as the IDB in Latin America)and global MDBs (such as the IFC, World Bank,etc.). This includes S&S bonds, which saw heavy
development bank issuance across the world
during 2020-21 to finance responses to theSovereign

Cumulative

USD Billions

Loans are only obtained by companies (i.e.,
corporates and, in some cases, governmentbacked entities, according to the Climate Bonds
classification), while bonds (and Sukuk) can beissued by a range of organisations. But the profile
of issuer types also varies considerably whencomparing themes.

Government-Backed Entity

20

NB: Individual country analyses are provided in
the appendix.

Issuer type profile varies bytheme and instrument type

Local Government

25

Overall, Singapore accounts for 63% of
cumulative issuance, slightly above the 60% in
2022. It is quite possible that the years ahead may
bring further convergence across ASEAN, alongwith the entry of new countries from the region.

Financial Corporate

5

2022

2022

Cumulative

2022

Cumulative

2022

0Green bondGreen loan

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

Green Sukuk

2022
Social &Sustainability

SLB

SLL

Source: Climate Bonds Initiative9

By contrast, a much lower share of 2022 versus
cumulative issuance came through small deals.
Only a few green bonds, sustainability bondsand SLLs under USD100m were issued, largely
from non-financial corporates followed bygovernment-backed entities.

Short tenors are common in ASEAN across all themes; but green bonds,
green Sukuk and S&S bonds saw more long-dated deals in 2022
Up to 5Y

The first sustainability bonds with a tenor above
20 years (excluding perpetuals) came in 2022,
while most of the green bond volume maturing in
20 or more years also came in 2022.

>20Y

Perpetual

N/A

Cumulative
Cumulative

20
Cumulative
15

2022

10
USD Billions

2022 deal tenors were relatively longer thanamong cumulative issuance. This may reflect
adverse and volatile market conditions, withissuers favouring longer dated projects/
instruments and/or refraining from issuing
shorter term debt and waiting for morefavourable interest rates.

10-20Y25

As the World Bank notes, the outreach ofsustainable financial markets is extremely limited,with a sizeable gap in sustainable financing,
especially for SMEs.8 Ultimately, organisations of
all sizes will need to finance their transition andsustainable activities.

Relatively high share of longtenors in 2022

5-10Y

5

2022

2022

Cumulative

2022

Cumulative

2022

0Green bondGreen loan

Green Sukuk

2022
Social &Sustainability

SLB

SLL

Source: Climate Bonds Initiative

NB: The term of many green loans was unclear or not found, and classified as not available (N/A).
This reflects the fact that loan arrangements are often private and public disclosure is usually lacking.
Some may be revolving facilities.

Bonds generally have longer tenors than loans.
According to Climate Bonds’ data, no loans(green or sustainability-linked) were arranged
with a term of over 20 years.
Almost all SLLs from 2022 had a term under five
years, with targets being set within that period.
On one hand, short tenors among sustainabilitylinked instruments may be positive given thatthey may encourage more immediate action
from corporates to improve sustainability
performance; but it also raises doubts as to how
significant those improvements are given the
short time frame, and whether the issuer has arobust and ambitious transition strategy looking
further ahead. This is particularly relevant amongloans, which are privately arranged and lacksufficient disclosure and transparency (e.g., tounderstand and assess the issuer’s targets andtransition plans).

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative10

GreenLower green volumes in 2022 but only Malaysia did not have issuance
16

Green debt issuance in
ASEAN totalled USD12.8bn
in 2022, representing
25% of the cumulative
green volume issued
since 2016 (below the
32% in 2021).

12

60
Indonesia

Malaysia

Philippines

Singapore

Thailand

Vietnam

45

8

30

4

15

Green issuance from Malaysia peaked in 2019
and the country was the only one from theASEAN-6 group with no deals in 2022; stimulatinga rebound should be a key focus area for local
policymakers as well as market participants,
and is likely to be supported by the policies andinitiatives mentioned in the spotlight sections..

USD Billions

Singapore remains the top domicile by a longway, both on a yearly and overall basis. Indonesia
achieved a record volume in 2022 but only
through a single deal, its USD1.5bn sovereign.

Thailand and Vietnam have had consistentactivity in recent years although volumes arestill relatively low, not yet surpassing USD1bn
yearly. Almost all issuance from Vietnam hascome in the green theme, mostly from loans.
The country has more issuers than Thailand,
Indonesia and Philippines, but a considerably
lower amount issued, pointing to a wider baseof smaller issuers.

issuance is an important reason behind it, but
the average amount per issuer has also generally
increased among other issuer types. Adverse
market conditions could explain part of theincrease, potentially impacting smaller issuers
more and preventing some from coming tomarket.

The total number of ASEAN green issuers in
2022 was about half that of 2021, almost 20%
lower than in 2020, and the same as in 2019. But
volumes were only 25% lower than in 2021, and
50% higher than in 2020 and 2019, meaning the
average amount per issuer was considerably
higher in 2022 (USD535m in 2022 while theprevious highest was USD361m in 2019).
This trend is more visible among green debt thanany other theme. The acceleration of sovereign

0

0
2017

2018

2019

2020

2021

Number of issuers

Number of issuers (RHS)

2022
Source: Climate Bonds Initiative

Loans remain very popular in
ASEAN, led by Singapore
The profile of green instrument types in each country
in 2022 was broadly similar versus cumulatively.
Loans continue to be very popular in the region,
most visible in its large SLL market but clearly
also in the green theme. They are the most used
instrument in Singapore, Thailand and Vietnam,
being second in Indonesia and Malaysia (behind
Sukuk). In the Philippines, only green bonds havebeen issued to date.

As domestic markets develop and mature,a more varied and balanced use of different
instruments is likely, although Sukuk will
nevertheless be expected to dominate in Islamic
countries and loans to remain highly popular in
most countries.
The issue of reliable, consistent and transparent
disclosure is an important one, however. Issuers
and financial market participants can andshould work to ensure an adequate level ofreporting exists, particularly among loans which
generally lack this. Governments and regulatory
bodies can play a vital role in supporting this, forexample by setting expectations on minimum
disclosure requirements which all instruments
should meet, and to facilitate the process
through clear guidelines and templates.

Sukuk dominates green theme in Indonesia and Malaysia, while loans dominate in almost all other countries
35

25

Bond

Loan

Sukuk

60

Number of issuers (RHS)

50

20

40

15

30

USD Billions

10
Cumulative

5
0

20

2022

2022
2022
Indonesia

Cumulative

Malaysia

2022

2022
Philippines

Cumulative

Cumulative

Cumulative

Singapore

Thailand

2022

10
0

Number of issuers

30

70

Cumulative

Vietnam
Source: Climate Bonds Initiative

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

11

GBP

JPY

AUD

CHF

20

Cu
m

22

20

Cu
m

100%

22
Cu
m
ul
at
iv
e
20
22
Cu
m
ul
at
iv
e
20
22
Cu
m
ul
at
iv
e
20
22
Cu
m
ul
at
iv
e

EUR

VND

ul
at
iv
e

USD

ul
at
iv
e

INR

80%
60%
40%
20%
0%
Indonesia

Malaysia

Singapore

Philippines

Thailand

Vietnam

Source: Climate Bonds Initiative

Proceeds in most countries are mainly allocated to Energy projects,
but Buildings top overall due to Singapore (cumulative)
EnergyBuildings

Transport

Water

Land use

Industry

Waste

ICT

Unspecified A&R

100%
80%
60%

6
EA
NAS

am
et
n
Vi

nd
ila
Th
a

or
e
ng
ap
Si

si
ne
do
In

in

0%

pp

Energy is the most financed project category inmost countries, representing more than 50% of
allocations in Malaysia, Thailand, Vietnam and
the Philippines.

ili

20%

a

Buildings and Energy accountfor almost 80% overall

es

40%

Ph

In 2022, USD was used relatively less in the green
theme (versus cumulative), suggesting green
bond markets in the region are becoming moredeveloped and local currency denominations
becoming more common.

PHPa

Malaysia remains the only country where only
one currency (MYR) has been used so far amonggreen deals.

IDR

si

The drop is most apparent among bonds,
where 38% of the cumulative amount is in hardcurrency (92% of which USD) compared toonly 1.5% in 2022. The only USD green bondwas from Singapore’s Solar United Network’s
USD70m deal, while Vietnam’s PC1 Group
Vingroup JSC respectively obtained USD173m
and USD500m green loans, and Indonesia issued
a USD1.5bn green Sukuk.

MYR

al
ay

Only 20% of the 2022 green volume was issued
in foreign (i.e., non-ASEAN) currencies, versus
33% cumulatively. The vast majority of foreign
denomination is USD, which accounted for 17%of the 2022 volume and 28% overall.

THB

M

In line with this trend, 2022 saw increased
denomination in local currencies at the expenseof foreign ones. In Singapore, by far the region’slargest market, barely any USD green debt wasissued in 2022.

SGD

22

Currency denominations vary considerably bycountry. More developed markets broadly havea higher share of local currency issuance, whilemore nascent markets make relatively greater use
of foreign (hard) currencies, namely USD.

USD accounted for a lower share across all countries in 2022

20

Increased use of local currency
in 2022

Source: Climate Bonds Initiative

In Singapore, however, Buildings take the lead,mainly related to construction of new green
buildings and to a lesser extent retrofits andenergy efficiency in the built environment.
Given the large size of the country’s market,
Buildings are also the most financed category
in ASEAN overall.

NB: Allocation of proceeds is estimated from disclosure at issuance by pro-rating equally between(financed) project categories, apart from deals issued in 2019 or earlier which have been updated based on
post-issuance reporting. Unspecified A&R is an estimate of the proceeds flowing to A&R projects that are notdirectly specified to the projects/assets in the other categories (e.g., A&R is considered eligible in the issuer’s
framework but the full list of projects/assets which will be adapted / made more resilient is not provided).

Indonesia displays the most balanced split of
UoP categories, with all except for ICT financed
and only Water and Industry achieving a sharelower than 10%. Almost all the largest deals fromIndonesia, including the sovereigns as well as
Bank BRI’s and Bank Mandiri’s, have a wide rangeof categories listed in their frameworks.

Despite some variation between countries always
being expected (due to differing local contexts
and relative importance of certain sectors),
greater variety and balance of projects is awelcome development, and a sign of a maturingmarket. Transport, Water and Land use projects,
for example, remain heavily underfunded in

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

most countries. On the other hand, shifting the(browner) manufacturing sector towards greener
activities may come more naturally throughtransition instruments, including SLBs and SLLs.

12

SPOs and assurance make up
90% of screened 2022 volume

Assurance was only used in Singapore and Certification in Thailand (2022)
No review

The analysis of external reviews isbased on a more restricted sample versus therest of this section, as it only includes screened
green debt from 2022 (not the unscreened loans
from Refinitiv).

Assurance was only used in three deals of the
19 deals covered, but two of these, issued by
the Singapore Housing & Development Board,
were relatively large (USD1.6bn). They wereassured by EY.
The level of Climate Bonds Certification
dropped to 5%, while green ratings were notobserved (unlike sustainability ratings – see thenext section).
The share of deals with no review fell considerably
during the year to only 5% of the amountissued. This likely reflects a) the exclusion of
unscreened loans from Refinitiv given that public
documentation for loans is more often lacking
or harder to find, and b) the larger size of issuersand deals accessing the market, since thesegenerally tend to obtain reviews.
Sustainalytics was the top SPO provider,reviewing 60% of the amount issued with an SPO.
Cicero (36%) was the clear second, with Moody’s,
DNV-GL and Vigeo Eiris reaching between 1%
and 2% each.
Only SPOs were used in Indonesia and thePhilippines, while in Singapore they werefairly evenly split with assurance. In Thailand,
Certification accounted for almost the entire
issuance volume, with all five deals from Global
Power Synergy Certified under Climate Bonds’
Solar and Wind Criteria. In Vietnam, none of thetwo deals were externally reviewed.

Green rating

SPO

Assurance

4
3
2
USD Billions

In line with previous reports and the global
market, Second Party Opinions (SPOs) remained
the most widely used form of external review
among ASEAN green debt in 2022, capturing 63%of the amount issued.

Certified

1
0
Indonesia

Philippines

Singapore

Thailand

Vietnam
Source: Climate Bonds Initiative

NB: Only screened green debt included in the external review analysis(i.e., excludes unscreened loans from Refinitiv).

SPO remained the most popularform of external review in 2022
Certification 5%
No review 5%

Assurance
27%
SPO
63%

Source: Climate Bonds Initiative

NB: Only screened green debt included in theexternal review analysis (i.e., excludes unscreenedloans from Refinitiv).

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative13

Social and sustainability

Social bonds differ from sustainability bondsin that the proceeds are only used for social
projects, rather than a combination of green
and social. Climate Bonds typically classifies
them as separate themes, but they have beencombined in this section since they are similar
instruments (apart from the UoP difference) andthere have been very few social bonds in ASEAN.
Only 10 social bonds from five issuers, totalling
USD905m, have been issued in the region(Thailand and Singapore), of which only one wasfrom 2022 (Thailand’s Government Savings Bank,
THB10bn/USD295m).
The region’s S&S market is also experiencing
an increase in the average amount per issuer,although this is less noticeable than with green
debt. In 2022 this reached USD671m, compared
to USD611m in 2021 and USD462m in 2020.

Indonesia

Number of issuers (RHS)
12

Malaysia
Philippines

69Singapore
Thailand

4

6

Vietnam

2

3

0

0
2017

2018

2019

2020

2021

Number of issuers

82022
Source: Climate Bonds Initiative

All countries have had S&S issuance denominated in local currency aswell as USD, except for Vietnam

at
iv
e

20

Vietnam

Cu
m

ul

22
Cu
m
ul

Thailand

22

20

at
iv
e

at
iv
e

JPY

Singapore

22
Cu
m
ul

Cu
m

22
20

EUR

at
iv
e

USD

at
iv
e
Cu
m

20

22

at
iv
e
ul
Cu
m

100%

SGD

MYR

ul

PHP

ul

THB

20

Singapore has a much smaller S&S versus
green market, and did not see any S&S deals
during 2022. This is in part likely to be a resultof the country’s small size and high population
density in a highly urban environment, whichhave brought a relatively high GDP per capita.
But building a more robust and varied labelleddebt market to finance a wider array of projects(including social) still presents significant
potential and should not be overlooked bypolicymakers and market participants, especiallygiven rapidly increasing income inequalities overthe last 25 years.915

22

The country ranking is very different to
the green debt market. Thailand leads theway cumulatively with USD9.1bn, while thePhilippines is second (USD6.4bn) and top in 2022
(USD3.6bn), and Malaysia is third (USD4.4bn).

10

20

Thailand tapped its original 2020 sustainability
bond three times in 2022 for THB55bn/USD1.8bn,taking its total to THB212bn/USD6.8bn, while
also issuing a new THB35bn/USD948m bondlater in the year. The Philippines became a firsttime thematic sovereign issuer through six deals
totalling USD2.3bn: four in JPY and two in USD,
ranging in maturities between five and 25 years.

Philippines boosted by sovereign sustainability bonds in 2022;
no issuance from Singapore, Indonesia and Vietnam

USD Billions

All ASEAN-6 countries saw S&S
bond issuance in 2021, but in
2022 this only happened in
Thailand, Malaysia and thePhilippines. Even so, the total
S&S volume was almost as
high, driven by large sovereign
sustainability deals fromThailand and the Philippines
which account for the lion’sshare of the cumulative S&S
sovereign volume.

80%
60%
40%
20%
0%
Indonesia

Malaysia

Philippines

Source: Climate Bonds Initiative

Less currency diversification
versus green
In line with its relative size, the ASEAN S&S market
shows less currency diversification than its green
counterpart. This includes the use of fewer local
and foreign currencies, the latter being highly
concentrated in USD looking at number of deals,
but less so looking at amount issued.
The main reason for the USD’s lower share byamount issued is that most of the Philippines’
2022 sovereign deals came in JPY, a new
currency for the region’s S&S market. This follows
on from the JPY/PHP currency swap facility
under the cross-border liquidity arrangement
between the Philippines’ Bangko Sentral andthe Bank of Japan, and is likely a result of
the Philippine Government trying to increase
its investor appetite and base through hardcurrency denomination.10 Its other, and larger,
sustainability bonds were issued in USD.

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

As the chart shows, Malaysia and the Philippines
have had a relatively even split of local versus
foreign currency, while hard currency dominates in
the remaining countries; the exception is Thailand,
which has the largest and most developed market
and where almost all the deals (including all thelargest ones) were issued in THB.
Issuance in foreign (especially hard) currency
can increase the interest of international
investors, but using local currencies is also
important to foster the development of local
markets, and a greater share of local currency
denomination is a sign of more mature markets.
In Singapore, for example, the green debt market
is well established and most deals have been
denominated in SGD; by contrast, Singaporeansustainability bonds have almost all been
denominated in USD.

14

Transport

Water

Land use

Industry

ICT

Unspecified A&R

80%
60%
40%
20%

Vi

6
AS
EA
N-

m
et
na

la
n
Th

Affordable infrastructure and healthcare among most financed social
project types, while equality and food security the least (cumulative)
Healthcare

Employment/Training

Food security

Education

Affordable infrastructure

Microfinance

Equality100%…as is social UoP

provide support to the entire labour spectrum,
particularly as economies transition and newtechnologies are developed and deployed.

60%
40%
20%

Compared to green debt, a narrower range ofexternal reviews is generally available to socialand sustainability bonds. This is in part a resultof the S&S market being more nascent but more
importantly due to the inherent difficulty ofmeasuring and verifying social impacts. Climate
Bonds Certification, for example, is not an option,and SPOs hold an even higher proportion of S&S
debt in the global market than green bonds.
In ASEAN, SPOs again represent the lion’s sharewith 93% of the volume, including 100% in
Thailand and the Philippines. 79% of this wasprovided by Sustainalytics, followed by Vigeo
Eiris with 19% and DNV-GL with 2%.
Curiously, ratings were chosen by seven of the
17 deals in ASEAN despite only accounting for a
7% share of the issuance volume. Sustainability

6
NAS

Vi

EA

am
et
n

la
Th

ai

ng
ap
Si

pp
ili
Ph

All S&S bonds from 2022 were
externally reviewed

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

nd

or
e

es
in

si
ay
al
M

In

do

ne

si

a

a

0%

Source: Climate Bonds Initiative

ratings were the most popular form of review
among Malaysian sustainability bonds (65% ofamount issued). Their popularity among small
deals in Malaysia may be linked to both providers
being local (RAM Sustainability and MARC), andperhaps cheaper than alternative forms of review.

Sustainability ratings are popularin Malaysia driven by local
providers (2022)
8
SPO
6

Rating

4
USD Billions

Employment and/or vocational training isanother important category. ASEAN countries
have a varied profile of industries requiring a
range of skilled to less specialised manual work,
but employment and training programmes can

ai

ga
p
Si
n

Ph

Source: Climate Bonds Initiative

NB: Refers to green allocations from sustainability bonds (since social bonds only finance projects).

80%

The provision or support for affordable
infrastructure – often targeting lower-income
groups – is among the project types highlighted
most by ASEAN S&S issuers, and typically focuses
on affordable housing (in line with the rest of
the world). All sovereigns issued until now haveincluded this as an eligible project type, generally
through direct provision of social housing and/or
targeted government programmes/subsidies forthe poor and very poor.

d

or
e

es
in
pp
ili

al
ay
si
a

0%

The more surprising finding is that Thailand’s
sustainability bond market only features
allocations to five categories (Energy, Buildings,
Transport, Water and Land use), which is tied with
Vietnam as the lowest number despite being theregion’s largest market. This is explained by thefact that while the amount issued is relatively large,
there are only nine Thai deals from four issuers,
and they mostly finance the same categories.
The sovereigns are the most varied, with all fivecategories listed as eligible expenditures.

Social allocations (from sustainability andsocial bonds) are also varied, with all categories
represented in most countries. Climate Bonds’
classification and tracking of social UoP is arelatively recent addition and is broadly in linewith the categories listed in ICMA’s Social Bond
Principles, which most issuers adhere to.

Waste

100%

M

In addition, this split is based on disclosure at
issuance only, with the proceeds split evenly
across the categories listed in the document(s)relevant to each bond (generally issuer
frameworks and external review documents).
In practice, issuers often do not finance all thecategories listed in their frameworks, or do so in
an uneven way. The analysis in the green themeis thus more representative of actual rather thanestimated allocations, as the UoP for deals issued
up to 2019 has been updated based on postissuance disclosure.

Buildings

esia

The split is more even than in the green
theme, which given the smaller size of thesustainability bond market (just under 50%) issomewhat surprising; but it can be explained bysustainability bonds financing a combination ofgreen and social projects, and more rarely being
focused on single types of projects (such as
Buildings among Singaporean green debt).

Energyon

Allocations to green projects (from sustainability
bonds) are varied, with almost all categories
financed in each country and reaching asignificant share.

Sustainability bond allocations more even than for green
instruments (cumulative)IndGreen UoP across ASEAN
is varied…

2
0
Malaysia Philippines Thailand
Source: Climate Bonds Initiative15

Sustainability-linked

Growth of SLBs and SLLs
The sustainable debt market is still at an earlystage, especially in ASEAN where the developmentof some regional bond markets are themselves
relatively new. Within the region, as green andsustainable financing grow, the emergence of
SLBs and SLLs opens the door for more issuers toparticipate in sustainable financing.
SLBs and SLLs are forward-looking, performancebased, general-purpose debt instruments issued
with KPIs and associated SPTs at the entity level.
SLBs and SLLs can be a useful tool for issuers on
a low-carbon transition trajectory as they financewhole entities in transition and help to build
experience and credibility on target-setting.
As general-purpose instruments, a major advantage
of sustainability-linked instruments lies in theflexibility caused by the absence of pre-definedeligible projects. While the issuer commits toreaching their ESG goals, there are no restrictions
on how to spend proceeds. Moreover, in contrast
with the GSS debt markets where a limited numberof projects with environmental and social benefits
can be considered, any company can issue SLBs
or SLLs, which helps to broaden access to thesustainable finance market across more issuersin more sectors (especially SLLs which can be
relatively small and accessed by smaller entities).
Following the publication of the first Sustainabilitylinked Loan Principles (SLLP) in 2019 to formulatemarket best practice for SLLs, the International
Capital Market Association (ICMA) announced
the Sustainability-Linked Bond Principles (SLBP)in June 2020. The SLBP are voluntary guidelines
intended to foster the development of the SLB
market. This market segment started to grow inthe second half of 2020, particularly in ASEAN
where it was seen to enable issuers to access theASEAN SLB Standards (SLBS) were recently
published by the ACMF (see page 23). These are
expected to support SLB issuance across a broader
issuer base while ensuring enough consistency instructures and transparency.
Meanwhile, SLLs do not benefit from similar
standards, at least for now. It is worth noting thatloan markets are generally more opaque in theirdisclosure and it is generally harder to ensure
adequate levels of transparency among SLLs.

Caution is advised, at least
for now
Despite the impressive growth and popularity of
SLBs and SLLs, issuers, borrowers, and investors
must be mindful of the pitfalls around the targetlinked mechanism. To be seen as useful andcredible sustainable finance instruments thatyield real behaviour change for an entire entity,these deals should always have ambitious SPTs,
calibrated in line with sector-based pathways,
and provide significant financial reward/penalty.

clear guidance the sustainability-linked instrument
market could be a valuable addition to thesustainable finance landscape in ASEAN, including
in enabling entity-level transitions. The recently
published SLBS are a very positive step to addresssome of these issues, but are limited to SLBs whose
volume is much lower than SLLs in ASEAN.

Transition (UoP) bonds arerare globally
Transition bonds are UoP instruments meant tofinance transition-related investments, but are
far less popular than SLLs and SLBs. Few exist
globally, and this is expected to persist until clear
transition taxonomies exist against which toevaluate eligible transition projects. Transition isnecessarily an entity-level concept which, at least
for now, lends itself better to the general-purpose
format. In ASEAN, the only transition bondremains the CNY2bn (USD310m) two-year deal
issued by China Construction Bank’s Singapore
branch in 2021 (see page 8).
NB: Climate Bonds tracks SLBs but does not (yet)screen them (e.g., for ambition of their SPTs andalignment with Paris decarbonisation pathways).
SLLs are neither tracked nor screened, the analysis
being indicative based on Refinitiv data.

Other key concerns include the difficulty tobenchmark the ambition of the targets or KPIs
against a wider global ambition such as theParis Agreement. Most of the SPTs and KPIs have
only been prescribed by (1) the borrowers’ own
entity-specific sustainability improvements, not toa sector-wide decarbonisation pathway, and (2)exhibit limited transparency in the market especiallywith impressive growth – making it difficult to assess
the impact and ambition of each bond or loan. These
concerns are not insurmountable and with some2022 SLL volumes were lower
but remained healthy
SLLs represent the largest thematic finance segment
in ASEAN, likely driven by the prevalence of theloan format in the region and the flexibility ofthis instrument along with its accessibility acrossissuers and sectors. ASEAN economies have many
manufacturing activities which present potential
for performance linked instruments to finance theirtransition. Many SLLs have come from the financesector but with KPIs linked to real economy financing.

SLLs: Singapore remains clear leader but Indonesia grows most in 2022
Cambodia

Indonesia

Malaysia

MyanmarPhilippines

Singapore

Thailand

VietnamNumber of issuers (RHS)

25

30

20

24

15

18

10

12

5

6

0

0
2018

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

2019

2020

2021

Number of issuersThis financing can comprise transition UoP bonds
and/or performance-linked instruments such as
SLBs and SLLs. Performance- or sustainabilitylinked instruments have grown much more thantransition UoP bonds (both globally and in ASEAN),
and are discussed in more detail in this section.

sustainable finance market and promote capital
mobilisation in a novel way. From the demandside, SLBs present additional opportunities
for investors to allocate capital to meet theirsustainable investment targets and serve growing
demand for eligible financing opportunities.

USD Billions

Sustainable finance has
played an importantrole in financing ASEAN’s
green investments, but
gaps remain. The GSS
labels alone do not cover
the financing needs ofhigh-emission and hard-to-abate brown sectors.
Therefore, transition finance is needed to support
rapid change in emission-intensive activities
in these sectors, such as heavy manufacturingindustries and agriculture, while helping to phaseout environmentally harmful activities, such as
the use of coal.

2022
Source: Climate Bonds Initiative16

Smaller SLB market was impacted more acutely in 2022;
vast majority of issuance is from 2021
2.52020 was a pivotal year for the region’s SLL
market, with issuance stemming from all eight
countries; Cambodia and Myanmar are the ‘extra’ones not covered by GSS instruments, but theirissuance remains small and was absent in 2022.

Smaller SLB market impacted
more acutely
The ASEAN SLB market is more recent, the firstdeal having been Olam International’s JPY7bn/
USD67m in December 2020. It is also muchsmaller, only reaching about 5% of the size of the
SLL market, and with fewer countries represented.

USD Billions

Singapore kickstarted the ASEAN SLL market
in 2018 and has remained the largest source of
SLLs each year by far. However, several issuers
are multinational corporations with operations inmany countries, such as Olam International andLouis Dreyfus Asia.

Cambodia

Indonesia

Malaysia

MyanmarSingapore

Thailand

VietnamNumber of issuers (RHS)

8

1.5

6

1.0

4

0.5

2

0

0
2020

2021

USD dominates sustainability-linked format, but local currencies
are also used (cumulative)
AUD 3%
JPY 2%

SGD
21%

CNY
2%

THB
1%
MYR
1%

USD
69%

EUR
1%
Source: Climate Bonds Initiative

2022: Singapore’s large SLL market reflected in currency diversification
USD

MYR

SGD

AUD

Indonesia

Malaysia

Philippines

EUR

JPY

100%

USD very popular among SLLs

80%

The currency analysis, which combines SLLs
and SLBs given the small size of the latter, showsa high share of USD denomination driven by
SLLs. Given Singapore’s large market, the SGD is
comfortably in second place, but it is interesting
to note that the USD still dominates heavily
in Singapore; this contrasts with green debt
issuance, where SGD reigns supreme.

60%

It is not clear why there are such considerable
variations in currency use between themes.
Hard currency – and specifically the USD – may
be favoured over local currency when obtaining
loans, but the share of USD among ASEAN green
loans is much lower than among SLLs, at justover 10%. The profile of issuers may also play a

2022
Source: Climate Bonds Initiative

The decrease in SLB volumes in 2022 was highly
pronounced, and the largest percentage drop
among all themes. Only one issuer from Singapore(Ascott REIT) and one from Malaysia (Cenviro Sdn
Bhd) came to market, the latter through two verysmall deals totalling MYR55m/USD13m.

Overall, fewer currencies have been used thanamong green debt instruments (i.e., SLLs have agreater concentration of currencies), despite themarket being slightly larger.

10

2.0

Singapore is again the clear leader in issuance,
but by a lower margin than with SLLs. Thailand,
Indonesia and Malaysia follow respectively.

The ACMF published its ASEAN SLB Standardsin October 2022 which may help to spur moreissuance through more formalised and clearer
guidance for corporates, and crucially help toprovide greater consistency in the disclosure.
It is broadly aligned with ICMA’s SLB Principles(see page 23).

Philippines

Number of issuers

In line with green debt issuance, ASEAN SLL
volumes experienced a marked drop in 2022, butwere still relatively healthy at twice the level of 2020
and actually included more domiciles than 2021.

40%
20%
0%
Singapore

Thailand

Vietnam

Source: Climate Bonds Initiativerole, with multinational corporates that accountfor a larger share of SLLs preferring USD given
their international operations. It could also bethat the markets are simply not developed andlarge enough to make any definitive conclusions –Climate Bonds will continue to monitor the space.
EUR denomination is comparatively very low,reaching only 1% of the cumulative SLL/SLB volume.

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

In 2022, a single currency was used in most countries;
generally the USD, except for Malaysia (MYR).
The chart highlights Singapore’s most developed
market and most diversified currency profile.
Sustainability-linked instruments from Singapore in
2022 were denominated in AUD, EUR and JPY alongwith USD and SGD. More variation in other countries
is also expected as their markets develop further.
17

Spotlight: Taxonomies in ASEAN
Overview and state of play oftaxonomies in ASEAN
A green or a sustainable financetaxonomy is a classification
system that allows for theidentification of activities
and investments that meet
specific eligibility criteria basedon environmental or broader sustainability
objectives. The popularity of taxonomies isreflected in the increasing number of countries
and regions following Climate Bonds (which
created the first, over ten years ago), China andthe EU. More specifically, almost 30 jurisdictions
have or are currently in the process ofestablishing a sustainable finance taxonomy.
The need for a sustainable finance taxonomy in
ASEAN was first identified in 2019 by the ACMF.11
This recommendation was subsequently reinforcedby the ASEAN Working Committee on CapitalMarket Development (WC-CMD), which highlighted
the importance of a common sustainable financetaxonomy in providing guidance and assurance
to the region’s financial sector.12,13
Financial sector regulators in key ASEAN
Member States (AMS) have been actively
developing sustainable finance roadmaps thatoutline ambitions for sustainable markets, withtaxonomies a key foundation to this.
The Securities Commission Malaysia (SC)recognised the need for a taxonomy in Malaysia tobuild climate resilience and provide greater clarity
in the financial sector, to be developed via the Joint
Committee on Climate Change (JC3), which the SC
co-chairs alongside Bank Negara Malaysia (BNM).14
In Singapore, the Green Finance Industry Taskforce(GFIT), convened by the Monetary Authorityof Singapore (MAS), proposed a taxonomy for
financial institutions in January 2021. The purpose
was for the tool to help stakeholders with theidentification of activities that can be either
considered green or transitioning towards green,with particular relevance to those active across
ASEAN.15 Adopting a traffic light classification
system to differentiate the contribution of anactivity to climate change mitigation, a key trait ofthis taxonomy is the criteria and thresholds related
to transition activities. This enables a progressive
shift towards net-zero across various sectors.
The Financial Services Authority of Indonesia (OJK)
and Thailand’s Working Group on Sustainable
Finance (WG-SF) followed suit, identifying thedevelopment of a taxonomy as a priority tooland initiative.16,17 The Vietnamese government
also announced its intention to develop a systemof national green classification standards andcriteria to classify and identify economic activities
towards sustainability, environmental and social
friendliness.18 Meanwhile, the Inter-Agency

Sustainable finance roadmaps and recommendations in ASEAN
ASEAN• Roadmap for ASEAN Sustainable Capital Markets (2020) by ACMF
• Report on Promoting Sustainable Finance in ASEAN (2021) by WC-CMD

Indonesia• Sustainable Finance Roadmap Phase I (2015) and Phase II (2021) by OJKMalaysia• Sustainable and Responsible Investment (SRI) Roadmap for the Malaysian
Capital Market (2019) by SC

Philippines• Philippine Sustainable Finance Roadmap (2021) by ITSF
• Philippine Sustainable Finance Guiding Principles (2021) by ITSF

Singapore• Green Finance Action Plan (2019) by MAS

Thailand• Sustainable Development Roadmap (2019) by SEC Thailand• Sustainable Finance Initiatives for Thailand (2021) by WG-SF

Vietnam• National Green Growth Strategy (2021) by the Ministry of Planning and Investment

Sustainable finance taxonomies in ASEAN (as of Q4 2022)
ASEAN• ASEAN Taxonomy for Sustainable Finance – Version 1 (ASEAN Taxonomy) (2021)

Indonesia• Indonesia Green Taxonomy: Edition 1.0 (THI) (2022)

Malaysia• Climate Change and Principle-based Taxonomy (CCPT) (2021)• Principles-based Sustainable and Responsible Investment (SRI) Taxonomy for
the Malaysian Capital Market (SRI Taxonomy) (2022)

Singapore• Green Finance Industry Taskforce (GFIT) Taxonomy – in development/consultation

Thailand• Thailand Taxonomy – in development/consultation

Technical Working Group for Sustainable Finance(ITSF) of the Philippines expressed its preferenceof having a principles-based taxonomy as partof the government’s action plans in promoting
sustainable finance in the country.19
With regards to already published taxonomies,
the ASEAN Taxonomy Board (ATB) – a
collaborative initiative of four ASEAN financesectoral bodies – released a taxonomy for theregion which aims to serve as an overarchingguide and a common building block to foster
sustainable finance adoption by AMS.
In Malaysia, BNM issued a broad principlesbased climate taxonomy for its regulated
entities in 2021. This was followed by SC’s moregranular sustainable investment taxonomy forthe country’s capital market in 2022, which
also introduced the first taxonomy with a social
component in the region.20,21 Indonesia also
launched its green taxonomy in 2022, providing
an overview of the classification of economic
activities that support environmental protection
and management efforts, as well as mitigation
and adaptation to climate change.22 In
Singapore and Thailand, proposed taxonomies
are currently in the consultation phase (as of thetime of writing).
While there are differences in the principles andmethodologies adopted in national and regionaltaxonomies, the basic structure of taxonomies

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

assesses whether an economic activity ismaking a substantial contribution to specificobjectives (environmental in the case of green
taxonomies) while avoiding significant harm toother objectives (commonly known as the ‘do no
significant harm’ principle, or DNSH).
Beyond this, taxonomies can generally beclassified via two main approaches:
1. Technical screening criteria-based,i.e., sector-specific thresholds and screening
criteria for economic activities based on theircontribution towards specific objectives;
2. Principles-based, whereby the taxonomy defines
a set of core principles for market participants.
Different approaches, objectives, granularity, andcoverage of activities in taxonomies impact theirpractical application in terms of data collection,
product design, and verification processes.
Detailed screening criteria and disclosure
requirements naturally provide a much stricterclassification system, although they are difficult
to set for an entire economy. When available, thisenables investors to better monitor the progressof investments and use the classification as aproxy of impacts within the respective sectors.
Similarly, financial institutions and intermediaries
can leverage the classification system for productand service development, risk management, andmarketing, branding and labelling.
18Comparison of sustainable finance taxonomies in ASEAN (as of Q4 2022)
Taxonomy

Approach

Objectives

Sector coverage

DNSH

ASEAN Taxonomy V1

Principle-based(Foundation
Framework)• Climate change mitigation

Sector-agnostic(Foundation Framework)

Essential criteria – an assessment
must be undertaken to ascertain
whether the economic activities
are causing significant harm to
the broader environment while
fulfilling one or more of theenvironmental objectives.

NB: V2 was releasedin March 2023 andwill be discussed in
more depth in future
publications

THI (Indonesia)

CCPT (Malaysia)(Technical screening
criteria to comevia Phase 2 – Plus
Standard)• Climate change adaptation• Protection of healthy
ecosystems and diversity(Plus Standard will be
sector-specific)• Promotion of resource
resilience and transition to
circular economy

Technical screening
criteria• Climate change mitigation

Principle-based• Climate change mitigation• Climate change adaptation

919 sectors and subsectors mapped tosub-sectors, groups,
and business activities
based on the Indonesia
Standard Industry
Classification (KBLI)

Although it does not address
DNSH criteria, it mentions thatthe impact of the economic
activity in the wider ecosystem
must be taken into account.
The taxonomy outlines that thefollowing environmental objectives
must be met: (a) Prevent, reduceand control pollution (air, waterand land); (b) Protect healthy
ecosystems and biodiversity; and(c) Use energy, water and othernatural resources in a sustainable
and efficient manner.

• Climate change adaptation

SRI Taxonomy(Malaysia)

Principle-based(Phase 1)(Technical screening
criteria to comevia Phase 2 –Plus Standard)

Environment• Climate change mitigation• Climate change adaptation• Protection of healthy ecosystems
and biodiversity

Indonesian traffic lights system
has been established basedon compliance with DNSH
criteria. The taxonomy has
four principles , including
Social and Environmental Risk
Management Principles; thisincludes precautionary prudential
principles in assessing socialand environmental risks throughidentification, measurement,
mitigation, supervision, andmonitoring processes.

Sector-agnostic(Phase 1)(Plus Standard
will include metrics
and thresholds forfocus sectors)

Guiding questions are provided toallow users of the SRI Taxonomy toassess the substantial contribution
and DNSH to any of the otherenvironmental or social objectives.

• Promotion of resource
resilience and transition to
circular economy
Social• Enhanced conduct towards
workers• Enhanced conduct towards
consumers and end-users• Enhanced conduct towards
affected communities andwider society

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

19

Comparison of sustainable finance taxonomies in ASEAN (as of Q4 2022)
Taxonomy

Approach

Objectives

Sector coverage

DNSH

GFIT Taxonomy(Singapore)

Technical screening
criteria• Climate change mitigation• Agriculture andForestry / Land Use

High-level guidelines around DNSH
will be included following the EU
approach.

Not yet finalised• Climate change adaptation• Protect biodiversity• Promote resource resilienceand circular economy• Pollution prevention
and control• Construction /Real Estate• Transportation
and Fuel• Energy (including
upstream)• Industrial• Information andCommunication
Technology• Waste and Water• Carbon Captureand Storage

Thailand Taxonomy(Thailand)Technical screening
criteria

Not yet finalised• Climate change mitigation• Energy• Climate change adaptation• Transportation

Incorporates generic DNSH.
Activity-specific DNSH criteria are
expected in due course.

• Sustainable water conservation• Resource circulation• Pollution prevention
and management• Biodiversity conservation

NB: The Singapore GFIT taxonomy was released for public consultations on 28 January 2021, 12 May 2022, and most recently on 15 February 2023.
Meanwhile, the public consultation exercise of the Thailand Taxonomy ran from 26 December 2022 to 26 January 2023. The information included in this report
is valid as of the time of writing.

Expected developments in 2023
ASEAN released Version 2 ofits regional taxonomy in March
2023, including the basis fortechnical screening criteria
as part of the Plus Standard(the second phase of thetaxonomy). This follows Version 1 of the ATB’s
ASEAN Taxonomy for Sustainable Finance, which
was released in 2021.23

2023

Malaysia’s capital market regulator is currently
considering a Plus Standards for its SRI Taxonomy,
while its central bank will expand the use cases
to include sector- or project-specific use cases for
CCPT, based on the Value-based Intermediation
Financing and Investment Impact Assessment
Framework (VBIAF) Sectoral Guides.24,25
Singapore is expected to publish its green andtransition taxonomy, pursuant to three rounds ofpublic consultations, by the end of H1 2023.26

Vietnam is in the midst of developing its
green taxonomy with environmental screening
criteria, thresholds and indicators, which aims topromote green credit (including green bonds) inthe country.28
NB: Correct as of the time of writing. It is
possible that some developments materialiseahead of publication.
Climate Bonds has worked with several AMS tosupport the development of taxonomies. This
included the ASEAN Taxonomy for Sustainable
Finance – Version 1 by providing sector-agnostic
guidance on principles that could be used to
identify sustainable activities. For the Indonesian
green taxonomy, Climate Bonds was invited toprovide broad intervention notes. Climate Bonds isalso currently supporting taxonomy consultationsin Thailand and Singapore, whilst providing
capacity development to various financial market
stakeholders, including in Vietnam, to ensure
effective taxonomy implementation.

Taxonomies –Climate Bonds
Climate Bonds launched its voluntary
guidelines in the form of a taxonomy
and related Certification scheme in 2012,
intended to be a guide to climate aligned
assets and projects.29 Consistent with thegoals of the Paris Agreement, the Climate
Bonds Taxonomy is based on the latest
climate science and identifies the assets,
activities and projects needed to deliver a
low-carbon economy.30

Thailand is set to complete the consultation of
the first phase of the Thailand Taxonomy in H1
2023. Focusing on the energy and transportation
sectors, this will potentially be expanded to cover six
environmental objectives in five economic sectors.27
ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative20

Status of taxonomies around the world (Q1 2022)31

RussiaUK

CanadaEuropean Union

Kazakhstan

Mongolia
China

MexicoDominican Republic
Colombia

Taxonomy in place

BrazilIndia
Sri Lanka
Malaysia
Indonesia
ASEAN

Chile

South Africa

Taxonomy in discussion
For more information on Climate Bonds’
views on taxonomies, please refer to thefollowing publications:

Recommendations
Other ASEAN jurisdictions,such as Cambodia and thePhilippines, are currently
considering green taxonomies.
Various efforts are also
being carried out to scale up
sustainable finance in other AMS, such as Brunei,
Laos and Myanmar, both through regional andnational levels.35,36,37
Although the progress of taxonomy development
varies among AMS, it is a positive note thatpolicymakers and regulators thus far recognise
the importance of cross-agency coordination andpublic-private sector collaboration in developing
a common classification of green activities forfinancing and investment purposes. This also
becomes important at an international level given
the proliferation of taxonomies across the region
and the rest of the world. Pursuing interoperability,
for example by using similar approaches and KPIs
as other existing taxonomies and maintaining
close dialogue across regulators, is vital.
Overall, AMS should assist their economies andregional counterparts to transition, including
through the implementation of taxonomies
that support national environmental priorities.
While different countries are at different stagesof this process, the following are Climate Bonds’
recommendations which apply to all countries:

Singapore

Australia

Taxonomy in draft
Taxonomy in development

Japan
South Korea
VietnamThailandPhilippines

New ZealandGlobal green taxonomy development, alignment,
and implementation32
ASEAN economies exposure to climatetransition risks: Applying taxonomy to enhance
climate disclosures33

Embedding sustainability into the COVID
recovery: A primer for ASEAN Central Banks34© Climate Bonds Initiative 2023

• Support the development of green andtransition taxonomies that are sciencebased, granular, inclusive and robust as
much as possible – this will facilitate theoperationalisation of the Paris Agreement
climate goals by AMS;

• Encourage financial institutions in ASEAN to
disclose climate-related risks and performanceusing the definitions of green- and transitionrelated assets from taxonomies, as well as
setting strategies and steering finance tomitigate these risks;• Increase the level of ambition over time –taxonomic classifications should be revisedover time in line with the necessary ambition of
relevant national and sectoral pathways;• Facilitate dialogue and greater cooperation
among AMS regulators/policymakers intaxonomy development, including capacity
building and exchange of technical capabilities
to scale up the development of sustainablefinance in respective capital markets.

• Support the interoperability of taxonomies(regionally and globally where possible)
to reduce market fragmentation risks andestablish a harmonised and science-based
common language for taxonomies;• Promote transition and green investments byapplying taxonomies to encourage and ease
the issuance of thematic bonds and other
innovative instruments across ASEAN markets;• Support the development of use cases for theapplication of taxonomies, alongside sharingof best practices for financial and real economy
players;• Set up guidelines and frameworks for entity
transition plan/strategy disclosures that allow
financial institutions in the region to monitor if
issuers/borrowers are developing, monitoringand on track to reduce carbon emissions andrisks in line with agreed targets by AMS;ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

Climate Resilience
Taxonomy
Climate Bonds has launched a Global
Resilience Programme which will
include developing guidance to enableissuance for projects that support global
climate resilience.38 The first phase of the
programme will focus on developing a
Climate Resilience Taxonomy, designed
to direct sustainable finance towards
credible resilience projects. The second
phase will involve the development ofdetailed criteria for all relevant sectors,
enabling Certification of resilience-focused
instruments across the entire economy.

21

Spotlight: Transition in ASEAN
State of transition planningin ASEAN
Transition is fundamental
across all companies andbusiness activities that areneeded beyond 2050 andhave a 1.5°C decarbonisation
pathway, especially in thehard-to-abate sectors (mainly industrial and/or reliant on fossil fuels, e.g., cement, steel,aviation). This means that companies whose
activities are not currently aligned with a lowcarbon economy, and for which substitutes either
already exist or will exist, must be supported
to transition away from their current ‘brown’activities while ‘re-orienting’ their business model
to align with a net-zero world.
Entities are increasingly publishing net-zerocommitments in line with national pledges toreduce GHG emissions and limit global warming
to 1.5°C. However, these net-zero targets areoften set only for the long term, without a clear
pathway or strategy outlining the businesschanges that will be needed or how the changes
will be financed and overseen. To operationalise
these commitments, it is necessary to identify
relevant sector decarbonisation pathways,
quantify the costs associated with required

business changes, establish senior level oversightto drive change, and put in place regular internaland external progress reporting.
Sustainable debt markets have mainly been
mobilised through the UoP instrument model,
particularly green bonds. As the market has
matured, and international and national taxonomies
developed to help define eligible assets andactivities and establish credibility, transition financeinstruments such as SLBs, SLLs and transition
bonds have emerged. While GSS bonds have been
concentrated in key sectors like energy, buildings,
and transport, with clear green assets/activities (e.g.,renewable energy generation), transition instruments
are more inclusive in that they can be accessed byissuers in high-emission, hard-to-abate sectors.

Crucial need for transition plans
To reach net-zero GHG emissions by 2050,
entities operating in many sectors must
undergo a major transformation. A key toolthat will enable this transformation is arobust transition plan that is science-based,
coherent, comprehensive, transparent, andcovers all material scopes of emissions andbusiness activities.
Transition plans identify and plan how an entity
will align its business activities with net zero by

2050, outlining the costs and implementation
action needed in the short and long term totransform operations. Recent economic growthin ASEAN has been underpinned by fossil fuels
which are plentiful and relatively cheap, meaningthat for many entities, current business models
are high-emission. Many companies in the region
also operate in the traditional hard-to-abate
sectors, which must make the most dramaticchanges to their business models if they are toreach net zero.
Transition plans allow organisations to chart
their transition path and evaluate progressover time, as well as communicate this to themarket/investors and reduce or even eliminating
greenwashing risks. They are also importantpieces to help companies access financing,
and will increasingly become a requirement toobtain sustainable financing, be it in the form of
performance-linked or UoP instruments. Amongthe former (i.e., general purpose, sustainabilitylinked instruments), transition plans can also
provide the necessary information to help
corporates and financial institutions structure
coherent and science-based KPIs and SPTs; thiswill facilitate the growth of transition financewhile increasing the clarity and credibility of themarket, and reducing greenwashing risks.

Overview of transition plans

Hallmark 2
Robust plans

Hallmark 3
ImplementationplansHallmark 4Internal
reporting

Hallmark 5
External
reporting

Ease ofaccessCompany

Hallmark 1
Paris‐aligned
targets

Siam Cement Group

StrongMediumMediumStrongStrongMediumMalayan Cement(YTL Cement)

Weak

StrongMediumMediumMediumMediumPT Semen Indonesia

MediumMediumMediumMediumMediumMediumGunung Raja Paksi

Weak

MediumWeak

MediumMediumMediumNS Bluescope/Bluescope

MediumStrongMediumStrongStrongMedium

PTT Global Chemical

Weak

MediumMediumStrongStrongMediumPetrochemical
Corporation of Singapore(suggested plan)

N/A

N/A

N/A

N/A

N/A

N/A

PT Cikarang Listrindo TBK

Weak

Weak

Weak

MediumMediumMedium

PTT Public Company
Limited

Weak

Weak

Weak

MediumMediumMediumOlam Singapore

StrongWeak

MediumMediumMediumWeak

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative22

Transition plans are currently not mandatory in
ASEAN, and very few companies have set plans thatmeet the characteristics of a credible and ambitious
strategy as defined by Climate Bonds. In line withother regions (namely the UK and EU), ASEAN
governments and regulators can and should
work to introduce requirements for mandatorytransition plans. The time is ripe, particularly withthe broader development of sustainability reporting
globally (see page 28), introduction of reporting
rules, tools and platforms from some ASEAN stock
exchanges, continued taxonomy development– including on transitional activities, e.g., in
Singapore – and recent publication of the ASEANSLBS (see below). In 2023, the ACMF has alreadyannounced it is developing transition guidelines
aimed at assisting companies in developing andcommunicating their transition plan and efforts.
Transition plans are voluntarily emerging fromearly movers in the private and public sector who
are attempting to identify the necessary steps
to align with a net-zero future. The content ofthese plans at present is extremely varied in both
quality and scope. It is expected that transition
plans will become mandatory for private sector
actors in many jurisdictions as part of the global
effort to meet Paris Agreement commitments andreach net-zero emissions.

Climate Bonds guidance: Five Hallmarks
As part of Climate Bonds’ Transition Programme,these needs were recognised early on, andthe first iteration of Transition Finance forTransforming Companies was published in
2021.39 This guidance, updated in 2022, provides
a simple yet useful principle-based framework
designed to support entities in developing
credible and ambitious transition plans. This
work is aligned with and complements guidancefrom other organisations including ICMA, GFANZ,
TPI, ACT Initiative, and SBTi, among others.
Climate Bonds’ latest guidance identifies
five hallmarks of a credibly transitioning
entity (Five Hallmarks), i.e., an entity whosetransition is rapid and robust enough to alignwith the global goal to nearly halve emissions
by 2030 and reach net zero by 2050. The Five
Hallmarks address the requisite ambition of entitylevel targets and reflect the entity’s willingness andability to deliver on those forward-looking targets.

The core aim was to provide guidance to entities
in terms of the content and scope of transition
plans in order to be considered a crediblytransitioning company.
Supported by the Oak Foundation, the report
incorporated an analysis of ten company-leveltransition plans (see previous page), a checklist
to achieve Climate Bonds’ Five Hallmarks of acredibly transitioning company, and guidance forissuers on SLBs.

Sustainability-linked
instruments
Entities operating in sectors
with well-established transition
pathways, such as real estate,transportation, and utilities, canrelatively easily identify projects,
assets, and expenditures
suitable for green (i.e., UoP) bond financing. For
those operating in hard-to-abate sectors such as
cement, steel, and basic chemicals, the pathways
are only beginning to be established and thejourney to net-zero can still, at least partially, relyon untested technologies. For these entities, theperformance- or sustainability-linked structure(SLBs/SLLs), and occasionally transition UoPbonds, can be more suitable financing vehicles.
The activity of issuing a sustainable debt
instrument, be it a green bond or an SLB, signals
to investors that the issuing entity is identifying
and addressing climate-related business risks.
As of December 2022, Climate Bonds had recorded
USD2.65bn of SLBs from ASEAN. However, issuers
have been criticised for a lack of ambition andcredibility, mainly because chosen targets are set
against business baselines rather than sciencebased pathways and are difficult to benchmark andcompare to peers and required sectoral trajectories.

ASEAN SLBS: an important tool
A key development in this space was therelease of ASEAN Sustainability-Linked
Bond Standards (ASEAN SLBS) by the ACMF
in November 2022.41 The ASEAN SLBS, which

Credible transition plans

are based on the ICMA’s SLBP, are intended
to contribute to the development of theregion’s SLB market by facilitating enhanced
transparency, consistency, and uniformity of
the instruments, thereby reducing due diligencecosts of investors. Issuers are required to outline
realistic SPTs in terms of ambition level andconsistency with the issuer’s transition plan,
alongside relevant disclosures for investors (atand post-issuance).
While the ASEAN SLBS do not answer allquestions (for example, specifying which
pathways should be used in each sector),they provide considerable guidance to issuers
across five core components: selection of
KPIs, calibration of SPTs, bond characteristics,
reporting, and verification. This is likely to not
only grow SLB issuance – hopefully towards themuch larger size of the region’s SLL market – but
also increase standardisation and, over time,
improve the level of ambition and credibility ofissuers’ transition plans and SLBs.

Climate Bonds’ instrument-level guidance
To reinforce the credibility of sustainability-linked
instruments, Climate Bonds encourages issuers
and others to use the following guidance:
1. Sustainability-linked instruments are
only as powerful as the entity’s underlying
transition plans: Sustainability-linked
instruments can be powerful, forward-looking
financial instruments when they include KPIs
with ambitious SPTs material to the main
sources of emissions. The transition impact of asustainability-linked instrument is intrinsicallylinked to the credibility of the transition plan andambition of associated performance targets.
2. Sustainability-linked instruments should
include all material scopes of emissions:
Paris Agreement-aligned targets call for GHG
targets: in the short-, mid-, and long-term;
to be inclusive of scope 1, 2, and 3; and to bealigned with a science-based sector-specificpathway which will limit global warming to no
more than 1.5°C.

Credible sustainabilitylinked bonds

Climate Bonds analysis:
ASEAN transition plans

Paris-aligned targets

Key performance Indicators
Sustainability Performance Targets

Following on from this work, Climate Bonds
recently published its Scaling Transition
Finance – ASEAN report, analysing the transition
plans of ASEAN-based entities to assess thecurrent state of transition planning and provide
recommendations for next steps.40 The entities
selected were from a range of hard-to-abate
sectors including cement, electric utilities, oiland gas, steel, chemicals and agriculture, andwhere possible were active in the debt markets.

Robust Plans

Strategies to achieve the SPTs

Implementation Action

Achieving the SPTs

Internal monitoring

Internal monitoring

External Reporting

SLB Reporting

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative23

3. Sustainability-linked instruments
require robust emission targets anddecarbonisation pathways: The strongest
sustainability-linked instruments utilise absolute
GHG emission targets, science-based sector
decarbonisation pathways, or GHG emission
intensity targets with a unit of production as
the denominator. Economic intensity targets
can be used but are considered less robust andambitious than absolute or physical intensity
methods. Credible economic intensity targets
require a greater annual percentage reduction(7% per year, compounded) and should be
calculated using the GHG emission per value
added (GEVA) method.
4. Sustainability-linked instruments shouldhave clear and consistent structures: The
strongest sustainability-linked instruments areclear and consistent in their structure, which ispreferred by investors/lenders. Issuers should
avoid setting call dates prior to KPI observation
dates, step-ups that only kick in at the end of thebond’s term, and performance target observation
dates being set after the maturity of the bond.
Climate Bonds encourages issuers to placefirst call dates after the KPI observation date or
include provisions in legal documentation that
apply the coupon step-up if the bond is called
before the KPI observation.

Transition Programme –Climate Bonds
Climate Bonds’ Transition
Programme aims tomobilise global capital for
financing the transitionof high-carbon sectors toalign with a low-carbon,
sustainable and resilient economy.42
Transition plans (also known as sustainability
strategies, climate policies, climate actionplans, and other related terms) underpin thestrategies for businesses to reach net zero.
Including relevant KPIs and targets among
other components, the plans outline theentity’s climate ambition and the business
transformation necessary to reach that ambition.
Climate Bonds has been involved in varioustransition-related initiatives in ASEAN:• Climate Bonds is one of the knowledge
and technical partners of PT Sarana Multi
Infrastruktur (Persero) (‘PT SMI’), which isIndonesia’s Energy Transition Mechanism(ETM) Country Platform Manager.43• Climate Bonds worked with Climate
Policy Initiative (CPI) and Rocky Mountain
Institute (RMI) to create guidelines for
credible coal phase-out projects, which
can facilitate the rapid transition to clean
energy globally. It provides a framework forassessing the climate and social credibilityof financial transactions that acceleratea managed phaseout of coal-fired power
plants (particularly relevant in some ASEAN
states) and has been released for public
consultation end-November 2022.44• Climate Bonds has been invited to be aknowledge partner of the Glasgow Financial
Alliance for Net Zero (GFANZ) Asia-Pacific(APAC) Network regional workstream todevelop guidance for financial institutions on
how they can facilitate the managed phaseout of coal power generation in the region.45• As part of its Transition Programme, Climate
Bonds continues to engage with relevant
stakeholders in ASEAN to provide guidanceand support needed for them to understand,assess and develop credible transition plans.
For more information on Climate Bonds’
views on transition finance, please refer to thefollowing publications:• Financing credible transitions: How toensure the transition label has impact47• Transition finance for transforming
companies: Tools to assess companies’
transitions and their SLBs48

Driving Green Investment – Climate
Bonds 2023 Transition Programme49
New industry standards and an expansion in
criteria and Certification avenues for investors
will be the foundation of Climate Bonds’
transition programme for the year ahead.
• Expand the Climate Bonds Standard– enabling entity-level and SLB/SLL
Certification (see box below);• Expand the Climate Bond Standard
Transition Sectors to Criteria for Hydrogen
Infrastructure, Energy Utilities, Metals andMining, and Commodities Supply Chain;• Proposed Crop and Livestock Criteria for 2023,
building upon existing Agriculture Criteria;• Continue providing guidance topolicymakers and regulators on gas, steel
and global resilience;• Build resilience in the age of volatility,
following the launch of its Global Resilience
Programme; and• Engage stakeholders globally to provide
guidance and support needed for them tounderstand, assess and deliver credible
transition plans.

• In collaboration with the United Nations
Global Compact Thailand (GCNT) and theThai Securities and Exchange Commission(SEC), Climate Bonds has translated its
sector criteria for hard-to-abate economic
sectors into the Thai language to guideindustry players as they develop theirtransition strategies and plans.46

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

24

Climate Bonds expands Certification scheme to include
corporate entities and SLBs50
Certification under the Climate Bonds
Standard Version 4.0 (CBS v4) is expanding
beyond UoP bonds to include non-financial
corporates and their sustainability-linked debt.
Launched in April 2023, the new CBS v4 is amajor new development for Climate Bonds,
which has driven credible climate financing forover a decade. Drawing from its experience indeveloping detailed sector criteria for assets,
activities and investments, Climate Bonds
intends to provide transparent science-based
criteria for non-financial corporate entities,
credible SLBs and similar instruments, andassurance for investors that sustainability
requirements have been met in respect of any
Certified issuance.

elements that indicate an entity’s
preparedness to transition to net zero.
Certification will be available for corporates
with emissions already ‘near zero’ as well as
those with activities in high-emitting sectors,
provided the corporate has suitably ambitious
performance targets and credible transition
plans. CBS v4 enables corporates aligned with
1.5-degree pathways, or those that will bealigned by 2030, to obtain Certification. SLBs
issued by and in respect of the activities ofqualifying non-financial corporates can also be
Certified under the CBS v4.

This work goes beyond sectoral transition
pathways and includes key governance

Recommendations
The development of a wellstructured, credible andambitious transition planunderpins the necessarytransition of entities, sectors
and economies. The creationof transition plans is currently voluntary, butsome countries are working to set regulations
that will lay out the requirements for mandatorytransition plans. For example, the Transition
Plan Taskforce launched by the UK Governmentis developing a gold standard for private sector
climate transition plans, complementing earlier
efforts by the Financial Conduct Authority (FCA)
which introduced mandatory transition plans(aligned with the TCFD) for listed companies,
regulated asset owners and asset managers.
Mandatory transition plan disclosure is also set to
be a feature of the EU’s CSRD.
No ASEAN country has made transition plansmandatory yet. Policymakers in the region
should implement mandatory transition plan
disclosure, and can use what has been done inother regions as a base in developing rules forthe disclosure – perhaps even through a regional
standard, which would bring much needed
consistency between countries. This should coverorganisations with material climate impacts andcould be introduced via a staggered approach,focusing on the most polluting and hard-toabate sectors first. There is also a considerable
amount of guidance from organisations like
Climate Bonds and others around what should
be included as part of transition plan disclosureand decarbonisation pathways.

For entities, Climate Bonds’ primary
recommendation is to develop a coherent,
comprehensive, and credible transition
plan that meets the Five Hallmarks and ispublished prominently on their website.
Most entities will need to transition their activities
towards net zero and should start planning forthis as soon as possible. Entities operating insome sectors may not yet have complete clarity
on precisely what needs to be done further down
the line but should nevertheless begin with what
is currently practicable.
As such, additional recommendations include:• Create a plan! Start the journey; enhance andimprove over time.
• A transition plan should be contained ina single, clearly labelled, easily accessible
document.
• The plan should be dated and include anindication of how frequently it will be evaluated
to incorporate ongoing developments.
• Labelling and terminology should be appliedconsistently across the transition plan andrelated documents.
• Transition plans should address all Five
Hallmarks, and where there are gaps, theseshould be explained and a clear plan toaddress them should be included; and• To ensure maximum credibility and impact,
any organisation planning to issue an SLB
should follow the guidance given in the Scaling
Transition Finance – ASEAN report alongwith the recently published ASEAN SLBS.
This includes linking the SLB/SLL and related
SPTs with the information contained in thetransition plan of issuers/borrowers.

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative25

Spotlight: Supportive policies to scale up sustainable finance in ASEAN
Sustainable finance policyin ASEAN
The state of ASEAN sustainablefinance has improved
substantially since the releaseof the Roadmap for ASEAN
Sustainable Capital Markets
and the Report on Promoting
Sustainable Finance in ASEAN, in 2019and 2021 respectively.
At a regional level, the ACMF released the ASEANSLBS and ASEAN Sustainable and Responsible
Funds Standard (SRFS) in 2022, both of which are
expected to support ASEAN in narrowing the gap
toward net zero.51
Under the 2022 ASEAN Chairmanship of Cambodia,
the Securities and Exchange Commission of thePhilippines, alongside SC Malaysia, continue
to steer regional sustainable capital market
initiatives which have been crucial in accelerating
the bloc’s sustainable finance agenda.
The Indonesian financial sector regulator
introduced its own green taxonomy, guided
by its Sustainable Finance Roadmap Phase
II. The central bank has also incorporated
sustainability considerations in terms of reserve
management and macroprudential policy
formulation, as mentioned in its 2022 annual
financial stability review.52 In partnershipwith the Asian Development Bank (ADB), theGovernment of Indonesia launched the ETM
along with a national ETM country platform tomobilise finance to support the transition tocleaner energy use in key sectors, in addition toannouncing a JETP with International Partners
Groupwhich will mobilise USD20bn over the next
three to five years.53,54 This complements efforts
by the Ministry of Finance to adopt ESG policy ininfrastructure financing.
In Malaysia, the capital market regulator
introduced a sustainable and responsible
investment taxonomy, alongside a suite of
ESG frameworks, standards, guidelines, anddisclosure requirements with its domestic
regulatory counterparts. Malaysian policymakers
and the financial sector have continued to
advocate initiatives and programmes toscale up sustainable finance capabilities andadoption throughout the economy via the Joint
Committee on Climate Change, thus accelerating
the financial sector’s response and resilience toclimate risk.
The Sustainable Finance Framework waslaunched by the Department of Finance of
the Philippines in early 2022, outlining its
intention to issue thematic debt instruments in
the international capital markets. Echoing thegovernment’s green finance agenda, the financial
regulators, both the central bank and securities

regulators also took their initiatives to emphasiseits commitment to sustainable finance,
demonstrated with the issuance of a circular
to banks and the publication of a sustainable
central banking strategy by Bangko Sentral ng
Pilipinas, in addition to the issuance of a set ofsustainable funds guidelines by SEC Philippines.
A range of climate and sustainable financeinitiatives were introduced in Singapore by the
MAS and the local exchange (SGX), including thelaunch of the second public consultation of its
green and transition taxonomy, disclosure andreporting guidelines for ESG retail funds, and newlisting rules on climate reporting for public listed
entities. Some key achievements that distinguish
Singapore versus its regional peers include theestablishment of an international advisory panel
on sustainable finance, the launch of a GFANZAPAC Network central office and the ChinaSingapore bilateral green finance taskforce. Allof these initiatives demonstrate the country’s
commitment to strengthening its position as aregional and international green finance hub.
Thailand embarked on the sustainable financejourney with the adoption of Sustainable Banking
Guidelines by the banking sector, issuance ofsustainable funds guidelines by the securities
regulator, as well as taxonomy development via
a cross-agency platform led by its central bank.
Various capacity-building initiatives have also
been conducted by policymakers and regulators,
in collaboration with the financial industry andinternational organisations such as Climate Bonds.
In December 2022, leaders from Vietnam andthe International Partners Group launched theJust Energy Transition Partnership (JETP), which
will mobilise an initial USD15.5bn of public andprivate finance over the next three to five years
to support the country’s green transition.55
In addition, its central bank issued a circularproviding guidelines for credit institutions andforeign bank branches on environmental risk
management in credit extension activities.56
More ASEAN countries are also accessing thethematic debt market. Cambodia saw its firstgreen bond issued in January 2023, positioning
the country as an emerging player in the green
finance market. Furthermore, ADB approved a
USD73m sector development programme tosupport Cambodia’s energy transition.57
Financial aggregation (for example via
securitisation) is an additional tool that can help
smaller projects to obtain funding, especially inless developed markets. To complement this,MDB and government support to de-risk (forexample through blended finance and first loss
capital) are important ways to attract funding tosuch projects/markets.

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

The road ahead for ASEAN
sustainable finance policy
Whilst several regional
initiatives and national
developments by policymakers
and international organisations
provided a strong momentum
in advancing the growth of
ASEAN sustainable finance markets in 2022,
stakeholders in frontier markets and countries
without any thematic issuance in the region
still have much work to do in accelerating theirsustainable and transition finance journey. This
includes increasing awareness and capacitybuilding efforts, enabling the development of arobust and varied regional sustainable financemarket whilst catering to the appetite and needsof local currency thematic instruments.
The need for incentives and supportive financial
policies have frequently been advocated by
the private sector, especially corporate issuers
inclined to raise financing for sustainable
activities. In the ASEAN sustainable debt
space, Singapore pioneered such initiative byintroducing the Sustainable Bond Grant Scheme
in 2017, to encourage the issuance of GSS
bonds, followed by the world’s first Green andSustainability-Linked Loan Grant Scheme in 2021.
Malaysia launched its SRI Sukuk and Bond Grant
Scheme, formerly known as Green SRI Sukuk
Grant Scheme, in 2018, to facilitate companies
raising finance to meet their sustainable financeneeds. Indonesia’s regulator and local bourse
also provided fee incentives for green bondissuances and listing (KDK No. 24/KDK.01/2018
and KEP-00038/BEI/05-2020). Similarly, SEC
Thailand waives approval and filing fees for GSS+
issuances, in addition to waiver of application
fee offered by the Thai Bond Market Association(ThaiBMA). Nevertheless, there is much rooms
for policymakers and regulators to consider
innovative financial incentives and initiatives tospur the demand and supply of the sustainablefinance instruments in the market.
Building on ASEAN taxonomy development
efforts, it may be timely for relevant ASEAN
sectoral bodies to consider the ACMF’s
recommendation for a regional transition
standard.58,59 Under the Roadmap for Sustainable
Capital Markets and the Joint Sustainable
Finance Working Group, the ACMF and WC-CMD
have advocated the benefits of transition bondsand SLBs, alongside some form of transition
finance mechanism/standard, to complement
existing green frameworks.
It may also be worthwhile to advocate andleverage corporate transition plans to facilitate
the provision of transition finance and accelerate
the bloc’s transition journey in the region. As
such, Climate Bonds’ transition and climate
26

Key supportive policy/initiatives across ASEAN in 2022
ASEAN

Indonesia• Release of the ASEAN Sustainability-Linked Bond
Standards (ASEAN SLBS)• Release of the ASEAN Sustainable and Responsible
Fund Standards (ASEAN SRFS)• Release of the ASEAN SDG Bond Toolkit Supplements:
Legal and Regulatory Aspects for ASEAN Countries• Targeted consultation on the ASEAN Taxonomy for
Sustainable Finance – Version 1

Cambodia

Announcement of USD73m energy transition development
programme (funded by ADB)

Singapore

Monetary Authority of Singapore• Launch of the ESG Impact Hub• Establishment of Sustainable Finance Advisory Panel• Launch of the Association of Banks in Singapore
Environmental Risk Questionnaire• Launch of the Sustainable Finance Technical Skills andCompetencies (TSCs) under the IBF’s Skills Framework
for Financial Services• Establishment of the GFANZ APAC Network Central Office inSingapore, with an advisory board chaired by MAS• Launch of second public consultation of the taxonomy by
the Green Finance Industry Taskforce (followed by a third
consultation in early 2023)• Issuance of circular on disclosure and reporting guidelines
for ESG retail funds• Launch of ESGenome Disclosure Portal, in collaboration
with SGX• Launch of Point Carbon Zero Programme, in collaboration
with Google Cloud• Establishment of the China-Singapore Green Finance Taskforce• Carbon tax set to increase from the current SGD5 per tCO2e
to SGD50-80 per tCO2e by 2030

Financial Services Authority• Release of Indonesia’s Green Taxonomy (THI): Edition 1.0
Ministry of Finance• Introduction of carbon tax• Issuance of ESG Framework and Manual• Launch of ETM Country Platform• Launch of JETP at G20 Summit

Malaysia

Ministry of Finance• Release of the Principles on Good Governance forGovernment-Linked Investment Companies (PGG)• Launch of the revised Malaysian Code for Institutional
Investors (MCII)
Securities Commission Malaysia• Release of the Sustainable and Responsible Investment(SRI) Taxonomy for the Malaysian Capital Market• Launch of the SRI-linked Sukuk Framework• Announcement on the expansion of SRI Sukuk andBond Grant Scheme – for issuances under SRI-linked
Sukuk Framework and ASEAN SLBS
• Issuance of Guidance Note on Managing ESG Risks forFund Management Companies
Bank Negara Malaysia• Launch of the Low Carbon Transition Facility (LCTF)• Release of the Policy Document on Climate Risk
Management and Scenario Analysis• Announcement of the Greening Value Chain (GVC)
Programme

Singapore Exchange• Launch of Project Marketplace• Announcement on new listing rules requiring all SGXlisted entities to provide climate reporting on a ‘comply
or explain’ basis starting on 1 January 2022, with the rules
becoming progressively tighter in the years to comeThailandBursa Malaysia (stock exchange)• Release of the enhanced Sustainability Reporting
Guide Framework (complementing this, a centralised
sustainability reporting platform in collaboration with
LSEG has been announced in 2023)• Launch of the Bursa Carbon Exchange (BCX)
Joint Committee on Climate Change• Publication of the Climate Data Catalogue• Release of the TCFD Application Guide for Financial
Institutions
Philippines

Department of Finance• Launch of the Sustainable Finance Framework• Launch of the Green Climate Fund Readiness Programme

Securities and Exchange Commission• Release of the Guidelines on Management and Disclosureof Climate-related Risk by Asset Managers• Collaboration between CDP and SEC Thailand to raiseawareness on and drive higher levels of environmental
disclosure in Thailand• Launch of the Thailand SDG Investor Map• Development of proposed Green Taxonomy (currently
under consultation)
Bank of Thailand• Release of the Directional Paper on transitioning toenvironmental sustainability• Announcement on the ESG Declaration by Thai Bankers’
Association
Stock Exchange of Thailand• Release of the Sustainability Reporting Guide

VietnamSecurities and Exchange Commission• Issuance of Rules on Sustainable and Responsible
Investment Funds
Bangko Sentral ng Pilipinas• Circular to banks on the release of the sustainablefinance roadmap and guiding principles• Launch of the Sustainable Central Banking Strategy

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

Government of Vietnam• Launch of the JETP
• Approval of 2022-2025 programme to support private firms
in sustainable business development
State Bank of Vietnam• Issuance of Circular No. 17/2022/TT-NHNN providing
guidance on environmental risk management in credit
extension activities of credit institutions and foreignbank branches

27resilience programmes (see pages 21-25)
could potentially be explored as a reference indeveloping such tools and best practices for
ASEAN member states. This is aligned to the ‘justand orderly transition’ concept which should also
be examined to strengthen the transition to a
low-carbon economy.

The revolutionary power of disclosure
Reporting and disclosure are a related
topic which underpin the ability of entities,
sectors and economies to improve theirsustainability performance. As is often said,‘what gets measured gets managed’ (andon the flipside what doesn’t get measured
doesn’t get managed!).
Climate Bonds has assessed reporting in thegreen bond market over the last few years andproduced multiple reports about this (the latest
one can be accessed here), finding that postissuance UoP disclosure is widespread while
impact reporting is also common, but to a lesser
extent.60 The quality of reporting, on the other
hand, varies significantly. This is true in both theglobal and ASEAN market, and is likely to holdin other segments of the thematic debt market(upcoming research will tell).
However, reporting is an even more important
topic looking beyond the instrument level,
because only with entity-level reporting can anorganisation’s entire activities and impacts beassessed. At least for now, it remains possible
for companies to, for example, issue green
bonds to finance green expenditures whileat the same time investing in brown assets,
potentially even worsening their entity-levelsustainability performance. Any entity withmaterial sustainability-related impacts should
thus be disclosing these, regardless of whether
it has accessed the thematic finance market oreven capital markets more broadly. And while
GHG emissions and associated climate transition
plans may be the most urgent core information
to report, the disclosure should cover allmaterial impacts, such as water, biodiversity,and social impacts.
Global as well as ASEAN policymakers must
work to ensure sustainability reporting acrossthe economy (likely starting with the largest
companies and/or most polluting sectors)
becomes a reality. Regulators in the EU are
taking the lead on this front, and others
including in the UK and USA are following.
In ASEAN, disclosure rules are starting to be
implemented, with existing ones listed on theprevious page.
In some countries, namely Singapore andMalaysia, exchanges are leading by providing
reporting guidelines and tools as well as
implementing clear mandatory disclosure rules
for listed companies. The SGX, for example,
introduced new listing rules requiring all

Policy Guide to Sustainable Finance Opportunities– Climate Bonds
Climate Bonds released its ‘101 sustainablefinance policies for 1.5°C’ programme forpublic consultation in October 2022, with thefinal document released in Q1 2023.61,62,63This comprehensive sustainable financepolicy guide provides a toolkit of 101 policy
levers available to governments, regulators,
and central bank policymakers to facilitate
the transition to net zero. It outlines how
policymakers can channel and accelerate
public and private investment to deliver
sustainable development, limit global
warming to 1.5°C and ensure climate
resilience. It outlines the breadth of policy
opportunities available, demonstratingthat governments can take immediate
action to enable transition and decarbonise
their economies.

Underpinned in the Climate Bonds manifesto
on ‘accelerating policy’, Climate Bonds aims to
expand its policy advocacy and engagement
to step-up efforts and reach an annual USD5tn
of labelled bond issuance by 2025.
Policymakers can tilt the playing field towards
green in three crucial ways:
1. Speed: ensure rapid action by
all decision makers;
2. Steer: tilt the whole economy
to transition; and3. Simplify: clarify and streamline
sustainable investment.

SUSTAINABLE FORFINANCE POLICIES

listed entities to provide climate reporting ona ‘comply or explain’ basis and launched the
ESGenome Disclosure Portal together with
the MAS in 2022. This is set to increase theavailability, quality and consistency of reporting
while making the process easier and morestreamlined for issuers, and centralising theinformation for users. Likewise, Bursa Malaysia
released a revised Sustainability Reporting
Guide to assist listed issuers in preparing
sustainability statements as part of its listing
requirements, and in 2023 has announced acentralised sustainability reporting platform
which will soon be launched in collaboration
with the London Stock Exchange Group (LSEG).
These are very positive developments thatshould be built on further by regulators acrossthe region. The work of regulators in otherjurisdictions and the standards set by global
bodies, such as the International Sustainability
Standards Board (ISSB), Global Reporting
Initiative (GRI), CDP (former Carbon Disclosure
Project), Task Force on Climate-Related Financial
Disclosures (TCFD), etc., can all be used todefine regionally adequate reporting standards
that clarify what entities should be measuring,
disclosing, and managing.

1.5°C

plan disclosure from thousands of companies
publicly available, with a beta platform expectedin H2 2023. Among disclosure platforms specificto thematic debt instruments, the Green Bond
Transparency Platform created by the IDB for
Latin America is the only one publicly available,
and has supported more consistent reporting in
the region.
Mirroring developments in the EU, the launchof an ASEAN taxonomy of green/sustainable
activities can act as a complementary tool that
supports enhanced disclosure, promising tobring greater consistency in definitions across theregion. This may be particularly relevant giventhat most countries are planning to or havealready created their own taxonomies, which
has the potential to bring fragmentation withlack of interoperability.

Further, a centralised disclosure platform
containing this data, at national or perhaps
even regional level, would be of immense
value, facilitating the process for reporting
entities while making the information moreconsistent and easily accessible for investors
and other users. The GFANZ-led Net-Zero Data
Public Utility is an interesting initiative set tomake climate-related reporting and transition

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative28

Appendix: Country analyses

Singapore is considered the region’s green
finance hub, and this is reflected in the manymarket- and policy-led initiatives that havebeen introduced particularly by the MAS (seespotlights, especially page 27.). Several of these
focus on the important topic of disclosureand aim to increase the availability, quality,
consistency and accessibility of reporting, forexample through the promising ESG Impact Hub,
ESGenome and Project Greenprint.
Looking ahead, the development of Singapore’s
GFIT taxonomy for green and transition activities
will further support the growth of a credible
market across different segments both inSingapore and ASEAN more broadly, helping todefine eligible projects in a consistent way for
financial institutions.
Multinational agribusiness company OlamInternational ranked top in 2022 with
USD4.875bn over two large SLLs (USD2.9bn and
USD1.975bn) through its Olam Agri Holdings
financing arm. The only other issuer with a deal
over USD2bn was Perennial Shenton Property
with an inaugural green loan worth SGD3bn(USD2.09bn). In a highly anticipated transaction,
Singapore’s Government also became a first-timeissuer with a 50-year SGD2.4bn (USD1.75bn)
green bond that will finance a vast array of
projects with environmental benefits.

Green loan

Green bond
40

SLB

SLL

Green Sukuk

Sustainability

Number of issuers (RHS)

60

30

45

20

30

10

15

0

0
2017

2018

2019

2020

2021

Number of issuers

Singapore boasts the largest
and most diverse thematic
debt market in ASEAN, with
USD81bn issued from 127
issuers (the latter being oneof the highest country figures
globally). Green debt and SLLs dominate
heavily, representing 96% combined interms of issuance amount. As an importantfinancial centre with an array of large financial
institutions ready to lend to sustainableprojects, loans are more popular than bonds.

Singapore: green debt showed the most resilience in 2022

USD Billions

Singapore2022
Source: Climate Bonds Initiative

Largest issuers in each theme, ranked by cumulative amount issued
2022 amountissued(USDm)

Fraser Property Limited

2,723

131

Loan

Perennial Shenton
Property Pte Ltd

2,091

2,091

Loan

Singapore Government

1,753

1,753

Bond

Singapore Housing &Development Board

1,638

1,638

Bond

Asia Square Tower 1 Pte Ltd

1,548

-

Loan

United Overseas Bank Ltd

1,500

-

Bond

FLCT Treasury Pte Ltd

81

-

Bond

WLB Asset Pte Ltd*

46

-

Bond

Sembcorp Financial
Services Pte Ltd

497

-

Bond

Nanyang Tech University

481

-

Bond

Ascott REIT MTN Pte Ltd

259

259

Bond

Olam International Ltd

9,925

4,875

Loan

Trafigura Pte Ltd

7,905

-

Loan

Flex Ltd (Flextronics
International)

2,000

-

Loan

Issuer

Green

S&S

SLB

SLL

FormatTotal amountissued(USDm)

Theme /
Segment*Includes WLB Asset Pte, WLB Asset II Pte, and WLB Asset III Pte

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative29

Nevertheless, Thailand’s market is already quite
diverse in terms of themes. Despite social bonds
remaining scarce across ASEAN, Thailand has
seen social issuance every year since 2019,
and the THB10bn (USD295m) deal from its
Government Savings Bank was both the only
social bond from the region in 2022 as well as thelargest one yet. It will finance projects linked to
employment, microfinance and equality.
2022 was marked by the Thai Government
tapping its 2020 sustainability sovereign
three times for a total amount of THB55bn(USD1.76bn), as well as issuing a new bond worth
USD948m. On the green side, Global Power
Synergy (PTT PCL) was by far the most prolificissuer in 2022, with five green bonds totalling
THB12bn (USD341m), taking its cumulative total
to THB19bn (USD565m).

Green bond
SLB

Green loan

SLL

SocialSustainability

Number of issuers (RHS)

6

15

4

10

2

5

0

0
2018

2019

2020

2021

Number of issuers

Thailand is a relatively large
ASEAN sustainable financemarket that has been
dominated by sovereign
sustainability issuance inrecent years. While this is avery positive development, an objective going
forward will be to increase corporate issuanceacross the size spectrum and to finance a greater
variety of sectors given that the focus of its GSS
instruments until now has been on renewableenergy. Similarly to developments in Singapore,
Thailand’s taxonomy of green activities isplanned to be finalised later in 2023 and is set
to be an instrumental tool to drive sustainable
investments in the country.

Variety of instruments in Thailand; sovereign deals support
strong sustainability bond issuance

USD Billions

Thailand2022
Source: Climate Bonds Initiative

Largest issuers in each theme, ranked by cumulative amount issued
FormatIssuerGreen

BTS Group Holdings

1,000

-

Bond

Global Power Synergy (PTT PCL)

565

341

Bond

Energy Absolute

376-

Bond +
Loan

Thailand Government

7,742

2,710

Bond

National Housing Authority

377

-

Bond

Government Savings Bank

295

295

Bond

Indorama Ventures PCL

802

500

Bond +
Loan

Thai Union Group
Public Co Ltd

523

-

Loan

Cal-Comp Electronics
Public Co Ltd

420

-

Loan

S&S

SLB/SLLASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

Total amountissued(USDm)

2022 amountissued(USDm)

Theme /
Segment

30

The sustainability theme dominates heavily
overall, with Malaysian issuers seemingly keen
to finance the social dimension (particularly
projects related to affordable infrastructure andemployment) along with projects delivering
environmental benefits. This is very likely related
to the positioning of thematic finance as SRI(sustainable and responsible investments, as
used in Malaysia) rather than a narrower green
focus on the part of regulators and other actors,
for example with the SC’s expansion of incentives
from green to broader thematic instruments aspart of the SRI Sukuk and Bond Grant Scheme
in 2018. Unsurprisingly, the only Malaysian
sovereign so far was a sustainability Sukuk.
The Malaysia market may well be at a criticalliminal point, with a variety of supportive
initiatives and policies introduced in 2022, suchas the SC’s principles-based SRI Taxonomy
launched in December. These are set to launch
the country to a new stage of development andlead to more consistent, robust issuance fromdifferent issuer types, further cementing thecountry as a leader in Islamic sustainable finance.
Thematic deals from Malaysia have tended to
be fairly small. A broad base of smaller issuers
is often a sign of a relatively developed market
and likely reflects the various local initiatives andpolicies that have been implemented to foster
issuance.
In 2022, for example, the average deal size was
USD79m, although most issuers came to market
more than once. Cagamas Bhd remained ahighly frequent issuer with four deals, matchedby first-time issuer Pengurusan Air Selangor Sdn
Bhd. CIMB Bank was one of the only issuers withjust one transaction, a USD500m deal that was
comfortably the largest of the year.

Green bond
SLB

Green loan

SLL

Green Sukuk

Sustainability

Number of issuers (RHS)

2.0

8

1.5

6

1.0

4

0.5

2

0

0
2015

2017

2018

2019

2020

2021

Number of issuers

Malaysia has also seenissuances across the thematic
debt spectrum, but at a smallerscale than both Singapore andThailand despite its first deal(a sustainability bond) having
come earlier, in 2015. In recent years, issuancehas been patchy and only sustainability bonds
have regularly come to market; they accounted
for 99% of the 2022 volume.

Malaysia has had issuance across GSS+ universe but more
size and consistency needed

USD Billions

Malaysia

2022
Source: Climate Bonds Initiative

Largest issuers in each theme, ranked by cumulative amount issued
FormatIssuerGreen

Permodalan Nasional Berhad

383

-

Sukuk

Quantum Solar Park
Malaysia Sdn Bhd

236

-

Sukuk

Telekosang Hydro
One Sdn Bhd

208

-

Sukuk

Cypark Ref Sdn Bhd

131

-

Sukuk

SEGI Astana SDN Bhd

104

-

Bond

CIMB Bank Bhd

1,180

500

Bond

Cagamas Bhd

1,174

146

Bond

Malaysia Wakala Sukuk Bhd

800

-

Bond

TNB Power Generation
Sdn Bhd

342

342

Bond

SME Development Bank
Malaysia Bhd

231

112

Bond

Axiata Group Bhd

802

-

Loan

S&S

SLB/SLLASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

Total amountissued(USDm)

2022 amountissued(USDm)

Theme /
Segment

31

2022 green sovereign supports Indonesia’s strongest year yet

Indonesia’s thematic market issomewhat similar to Malaysia’sin that issuance has spanned
all the segments but in apatchy way. Unlike Malaysia’s,
however, Indonesian deals
and issuers are relatively large, with the issuancevolume dominated by the sovereign transactions.

2022 also saw Indonesia introduce important
supportive tools and policies that are set tostimulate the nation’s thematic debt market.
Mirroring developments in other regional states,
the release of a green taxonomy by the Financial
Services Authority (guided by its Sustainable
Finance Roadmap Phase II) will bring moreclarity and consistency to the definition of green
activities, while the introduction of a carbon tax
and launch of the Energy Transition Mechanismby the Ministry of Finance are likely to spur moresustainable investments by corporates and byextension financial institutions. Hosting the17th G20 Summit in Bali in November 2022 may
have provided further impetus to Indonesia’stransition, coupled with the launch of the ETM
Country Platform and JETP.
Despite a record USD3.7bn issued, only five of thecountry’s cumulative 28 deals came during 2022,
translating into an average deal size of USD743m.
Apart from the sovereign green Sukuk, the only
other transaction reaching USD1bn (both in 2022
and overall) was an SLL from PT Bank Rakyat, its
first thematic issuance.

SLB

USD Billions

2022 was marked by Indonesia’s largest sovereign(green) Sukuk yet, a 10-year USD1.5bn deal wellreceived by the market. The country’s only othersovereign surpassing USD1bn was its first, a
five-year USD1.25bn Sukuk back in 2018. Afterissuing a sustainability sovereign in 2021, only
the green transaction came in 2022; one expects
the government to return to accessing othersegments in the years ahead.

Green bond
SLL

Green loan

Green Sukuk

Sustainability

Number of issuers (RHS)

4

8

3

6

2

4

1

2

0

0
2018

2019

2020

2021

Number of issuersIndonesia

2022
Source: Climate Bonds Initiative

Largest issuers in each theme, ranked by cumulative amount issued
2022 amountissued(USDm)

Republic of Indonesia

5,485

1,500

Sukuk

PT Perusahaan Listrik
Negara (PLN)

500

-

Loan

PT Wijaya Karya Tbk

383

383

Loan

Republic of Indonesia

586

-

Bond

PT Bank Rakyat Indonesia
Tbk (Persero)

500

-

Bond

Bank Mandiri Persero Tbk PT

300

-

Bond

PT Bank Rakyat Indonesia
Tbk (Persero)

1,000

1,000

Loan

PT HLI Green Power

711

711

Loan

PT Perusahaan Listrik
Negara (PLN)

600

-

Loan

IssuerGreen

S&S

SLB/SLL

FormatTotal amountissued(USDm)

Theme /
Segment

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative32

By contrast, volumes in other segments were
low. The level of green bond issuance was belowthat of the previous three years, the only deal
being a PHP10bn (USD170m) from repeat issuer
Acen Finance. Meanwhile, the only SLL was a
USD100m transaction issued by SMC Global
Power Holdings, the power arm of multinational
conglomerate San Miguel Corp.
There have been no green loans nor SLBs fromthe Philippines yet. Expanding and diversifying
the country’s market will be an important
objective going forward and should be supportedby the added visibility and framework of the
new sovereign issuances, as well as by thegrowing efforts of regulators and the central bankobserved during 2022. Further, SLB issuance
may be spurred by the launch of ASEAN SLBStandards by the ACMF just a few months ago. It
will also be interesting to see the impact of thePhilippines’ different principles-based taxonomy
once developed, and whether more technicaldefinitions will follow (which could rely on theregional taxonomy recently developed by the
ASEAN Taxonomy Board).

Green bond

Sustainability

SLL

Number of issuers (RHS)

4

8

3

6

2

4

1

2

0

0
2016

2017

2018

2019

2020

2021

Number of issuers

2022 was an important year for
Philippine sustainable financewith its inaugural sovereignissuances: three deals totalling
USD2.3bn, with the one
denominated in JPY issued asfour tranches ranging in tenors from five to 20
years. All were sustainability bonds financing avariety of green and social categories. First-timeissuer BDO Unibank (PHP52.7bn/USD1.03bn)
and repeat Rizal Commercial Banking Corp
(PHP14.8bn/USD289m) were the other twocontributors to sustainability bond issuance.

Philippine sovereign drives record year but green bond volume low

USD Billions

Philippines

2022
Source: Climate Bonds Initiative

Largest issuers in each theme, ranked by cumulative amount issued
FormatIssuerGreen

Ayala Corporation

1,170

-

Bond

ACEN Finance

570

170

Bond

BPI

401

-

Bond

Philippine Government

2,307

2,307

Bond

Rizal Commercial
Banking Corp

1,737

289

Bond

BDO Unibank Inc

1,029

1,029

Bond

S&S

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative

Total amountissued(USDm)

2022 amountissued(USDm)

Theme /
Segment33

Small but increasingly diversified GSS+ market

Vietnam’s thematic debt market
remains the smallest from theASEAN-6 group, but the last two
years have brought increasing
diversification with the firstgreen bonds (previously only
green loans), sustainability bonds and SLLs.
SLB instruments remain untapped, but this maychange given the ACMF’s recent launch of ASEANSLB Standards.

Whilst the Vietnamese green taxonomy iscurrently being developed and has yet to bereleased, the ASEAN-wide taxonomy published
may provide a good base of eligible activities
that can be used and/or adapted in Vietnam.64
In addition, and building on the JETP (which will
see an initial USD15.5bn of financing to transition
the country’s energy sector and which could
stimulate added thematic debt issuance), local
policymakers can implement more supportive
policies to grow a credible sustainable financemarket, including by drawing inspiration fromother countries in the region.

USD Billions

Only loans (green and sustainability-linked)
were issued during 2022, with five deals all fromdifferent issuers. The largest was a USD500m
green loan from automotive company Vinfast
Trading and Production, a subsidiary of thelarger conglomerate Vingroup JSC, as it expands
its electric vehicle production. This represents
Vinfast’s second transaction following a
USD400m green loan in 2021. Another Vingroupsubsidiary, Vinpearl JSC, had also come tomarket with a USD425m sustainability bond in
2021, the only one from Vietnam so far.

Green bondGreen loan

Sustainability

SLL

Number of issuers (RHS)

1.5

6

1.0

4

.5

2

0

0
2019

2020

2021

Number of issuers

Vietnam

2022
Source: Climate Bonds Initiative

Largest issuers in each theme, ranked by cumulative amount issued
FormatTotal amountissued(USDm)

2022 amountissued(USDm)

Vingroup JSC

900

500

Loan

Vietcombank

200

-

Loan

BIM Land

200

-

Bond

S&S

Vingroup JSC

425

-

Bond

SLL

BIM Land

107

-

Loan

Chailease Holding Co Ltd

90

-

Loan

Theme /
Segment

IssuerGreen

ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative34

Endnotes
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2. Bangko Sentral ng Pilipinas, 602: The JPY/PHP Swap Facility under
the CBLA between the Bangko Sentral and the BOJ, 2016.
3. Climate Bonds Initiative, ASEAN Sustainable Finance State of theMarket 2021, June 2022.
4. Climate Bonds Initiative, Green Bond Database Methodology, July 2022.
5. Climate Bonds Initiative, Climate Bonds Taxonomy, 2022.
6. Climate Bonds Initiative, Climate Investment Opportunities:
Climate-Aligned Bonds & Issuers, July 2021.
7. China Construction Bank, Annual Report on China Construction
Bank’s 2021 Transition Bond, 2022.
8. World Bank Group, Unleashing Sustainable Finance in Southeast
Asia, November 2022.
9. World Inequality Database, Singapore.
10. Bangko Sentral ng Pilipinas, 602: The JPY/PHP Swap Facility under
the CBLA between the Bangko Sentral and the BOJ, 2016.
11. ACMF, Roadmap for ASEAN Sustainable Capital Markets, January 2023.
12. ACMF, ASEAN WC-CMD, Report on Promoting Sustainable Financein ASEAN, April 2020.
13. WC-CMD and ACMF were established in 2003 and 2004 respectively
to support the integration of financial markets, ensuring theliberalisation of financial services and the sustainable developmentof capital markets.
14. SC Malaysia, Sustainable and Responsible Investment Roadmap
for the Malaysian Capital Market, November 2019.
15. MAS, Green Finance Industry Taskforce.
16. Sustainable Finance Indonesia, Indonesia Green Taxonomy
Edition 1.0 – 2022, January 2022.
17. Bank of Thailand, Sustainable Finance Initiatives for Thailand.
18. USDA FAS, Vietnam Issues Green Growth Strategy 2021-2030 Vision
to 2050, November 2021.
19. Bangko Sentral ng Pilipinas, Circular Letter No. CL-2022-011:
Philippine Sustainable Finance Roadmap and Guiding Principles,
February 2022.
20. BNM, Climate Change and Principle-based Taxonomy, April 2021.
21. SC Malaysia, SC unveils Principles-Based Sustainable andResponsible Investment Taxonomy for the Malaysian Capital Market,
December 2022.
22. Sustainable Finance Indonesia, Indonesia Green Taxonomy
Edition 1.0 – 2022, January 2022.
23. ASEAN, ASEAN Taxonomy for Sustainable Finance (ASEAN
Taxonomy Board), November 2021.
24. SC Malasyia, Principles-Based Sustainable and Responsible
Investment Taxonomy for the Malaysian Capital Market, December 2022.

25. BNM, Joint Statement by BNM and SC Malaysia: Updates at the 9th
Joint Committee on Climate Change (JC3) Meeting, December 2022.
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27. Bank of Thailand, Thailand Taxonomy Working Group welcomes
opinions on the draft standards for grouping economic activities
that take into account the environment (Thailand Taxonomy),
December 2022.
28. Gizmacro, Green Taxonomy for Green Credit and Green Bond
(Vietnam), August 2022.
29. Climate Bonds Initiative, Climate Bonds Taxonomy, 2022.
30. Climate Bonds Initiative, Climate Bonds Taxonomy, 2022.
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Transition Risks, April 2022.
32. Climate Bonds Initiative, Global Green Taxonomy Development,
Alignment and Implementation, February 2022.
33. Climate Bonds Initiative, ASEAN Economies’ Exposure to Climate
Transition Risks, April 2022.
34. Climate Bonds Initiative, Embedding Sustainability into the Covid
Recovery, May 2021.
35. UN ESCAP, ‹Advanced Draft› of Green and Sustainable Financial
Market Analysis: Financing Cambodia›s Future, March 2023.
36. Phnom Penh Post, Central Bank pushes Green Finance, July 2022.
37. Bangko Sentral ng Pilipinas, Circular Letter No. CL-2022-011:
Philippine Sustainable Finance Roadmap and Guiding Principles,
February 2022.
38. Climate Bonds Initiative, Building Resilience in the Age of Volatility,
November 2022.
39. Climate Bonds Initiative, Transition Finance for Transforming
Companies, 2022.
40. Climate Bonds Initiative, Report: ASEAN Companies Must Be More
Transparent on Transition Plans, January 2023.
41. ACMF, ASEAN Sustainability-linked Bond Standards, February 2023.
42. Climate Bonds Initiative, Transition.
43. PTSMi, Indonesia Launches ETM Country Platform to Accelerate
Just and Affordable Energy Transition, November 2022.
44. Climate Bonds Initiative, How to Finance a Credible Coal
Transition, November 2022.
45. GFANZ, Asia-Pacific Network.
46. Climate Bonds Initiative, Sector Criteria now available in Thai:
Agriculture, Bioenergy, Electric Grids, Hydropower and Transition,
March 2023.
47. Climate Bonds Initiative, Financing Credible Transitions(Whitepaper), 2020.

48. Climate Bonds Initiative, Transition Finance for Transforming
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49. Climate Bonds Initiative, Driving Green Investment – Climate
Bonds 2023 Transition Programme, January 2023.
50. Climate Bonds Initiative, Climate Bonds Standard V4.0.
51. ACMF, ASEAN Capital Markets Forum: Addressing the Challenges
Related to Sustainable Development, Inclusivity and Resiliency for the
Benefit of the Member States, October 2022.
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54. Indonesia Ministry of Finance, Grabbing Opportunity towards
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55. European Commission, International Agreement to support Viet
Nam’s ambitious climate and energy goals, December 2022.
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60. Climate Bonds Initiative, Post-Issuance Reporting in the Green
Bond Market 2021, May 2021.
61. Climate Bonds Initiative, 101 Sustainable Finance Policies for
1.5°C, October 2022.
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63. Climate Bonds Initiative, 101 Sustainable Finance Policies for
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64. Hanoi Times, Vietnam’s Green, Social and Sustainability Debts
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Prepared by Climate Bonds Initiative.
Authors: Miguel Almeida and Chi Xiang Wong
The authors thank Richard Lim (HSBC)
for his valuable comments.
Editorial support: Caroline Harrison
Design: Godfrey Design, Joel Milstead
Suggested citation: Almeida, M., Wong, C.X.,
ASEAN Sustainable Finance State of the Market 2022,
Climate Bonds Initiative, 2023.

© Published by Climate Bonds Initiative, May 2023
www.climatebonds.net

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ASEAN Sustainable Finance State of the Market 2022 Climate Bonds Initiative35