ASEAN Stock Exchanges to Enhance Trading Connectivity and Develop Standardised ESG Curriculum
In an ambitious move to foster regional collaboration and sustainability, six major ASEAN stock exchanges — from Malaysia, Indonesia, the Philippines, Singapore, Thailand, and Việt Nam — have announced plans to connect trading activities and establish a standardized environmental, social, and governance (ESG) curriculum for listed companies across the region. Additionally, the proposal includes the creation of an ASEAN ESG Award to recognize listed organizations demonstrating exemplary ESG practices.
These strategic initiatives were discussed during the 37th ASEAN Exchanges CEO Meeting hosted by Bursa Malaysia in Penang, Malaysia, in early July. The meeting saw participation from leaders of the stock exchanges of Malaysia, Indonesia, the Philippines, Singapore, Thailand, Việt Nam, with Cambodia and Laos joining as observers.
The conference addressed various measures to enhance the competitiveness of regional securities. A significant focus was placed on developing a sustainable ecosystem and improving connectivity between regional markets. A pivotal joint agreement emerged from the discussion, agreeing to collaboratively develop depository receipt products on each participating exchange. Depository receipts, representing shares of foreign companies, aim to broaden investor access to securities across neighboring countries, building on the success of similar agreements, like the one between Singapore Exchange (SGX) and the Stock Exchange of Thailand (SET) last year.
On sustainability, the conference highlighted the progress made in increasing information sharing among ASEAN exchanges and the adoption of a collective set of ESG indices. Also set in motion were four proof-of-concept projects, expected to span over the next three years, focusing on creating a cohesive regional market and sustainability framework.
One of these projects aims to establish ASEAN data infrastructure, which would standardize data structures and protocols to offer a shared regional market perspective and a unified operating model. Additionally, plans are underway to develop a standardized ASEAN ESG curriculum that aligns with both local and global requirements, designed to nurture listed organizations in an effective, scalable, and automated ESG assurance process.
Other significant initiatives include facilitating transition financing for corporate suppliers through banks, offering loan programs tied to environmental disclosures, and decarbonisation commitments, further emphasizing the focus on sustainability. Moreover, the contemplation of establishing an ASEAN ESG Award intends to globally amplify the corporate repute of exemplary regionally listed organizations.
The initiative for ASEAN Sustainable Ecosystem Connectivity began with a Memorandum of Understanding between Bursa Malaysia, IDX (Indonesia Stock Exchange), and SET in September 2023 and expanded to include SGX and the Philippine Stock Exchange (PSE). These collaborations underscore the collective effort towards sustainable development and integration within the ASEAN financial markets.
These proof-of-concept initiatives reflect a concerted effort to leverage strategic areas for establishing a sustainable and buoyant regional stock market ecosystem. “Our proof-of-concept projects focus our collective energy and resources on exploring and implementing viable models in targeted strategic areas,” commented Muhamad Umar Swift, CEO of Bursa Malaysia, highlighting the directive’s innovative drive and regional solidarity towards sustainable financial market development.
