Three Southeast Asian Stock Exchanges Consider Establishing ESG Ecosystem

The stock exchanges of Indonesia, Malaysia, and Thailand are contemplating the development of a cross-border environmental, social, and governance (ESG) ecosystem, aiming to strengthen business value and promote sustainable growth throughout Southeast Asia.

This initiative, viewed as a significant step towards enhancing regional collaboration and advancing sustainability in Southeast Asia, signifies a commitment to environmentally-friendly supply chains. It also highlights the potential for optimizing the connectivity and comparability of ESG data within the region. The decision to explore this ecosystem was announced in a joint statement on September 19, coinciding with the signing of a memorandum of understanding among the exchanges.

The collaborative effort encompasses several key objectives, including the identification of crucial components of the ESG infrastructure to support companies in their pursuit of decarbonization. It also involves the establishment of a 'sandbox' environment to facilitate trade and create new business opportunities, as well as the leveraging of expertise in ESG practices through workshops and training sessions.

Iman Rachman, President Director of Bursa Efek Indonesia, views this agreement as a reflection of their shared vision for creating a sustainable future for capital markets. He believes that collaboration is essential for driving positive change in the region.

Pakorn Peetathawatchai, President of the Stock Exchange of Thailand, anticipates that this move will lead to the development of an interconnected ESG ecosystem, ultimately supporting the integration of the ten-member Association of Southeast Asian Nations (ASEAN) markets as an attractive asset class for international investors.

Muhamad Umar Swift, CEO of Bursa Malaysia, underscores the bourse's objective to enhance cross-border cooperation and capitalize on opportunities to standardize ESG measures and infrastructure, thereby promoting sustainable business practices throughout Southeast Asia through this partnership.