ESG Trends for 2024: Asia Spotlight
As we move into the latter half of 2024, it is a good time to check in and reflect on the key themes within environmental, social, and governance (ESG) in Asia:
1. Rising sustainable financing and green bonds
S&P Global forecasts that Asia-Pacific’s sustainable bond issuance could rise about 10% in 2024 with the largest markets being South Korea, Japan and China collectively accounting for more than 75% of the region’s sustainable bond issuance. Asia is expected to account for 20% of global green bonds issuance. This continued strong hold within Asia for sustainability linked bonds are largely due to regulatory support from governments.
Hong Kong announced in its 2024-25 budget that to move towards a green future, it will continue to provide subsidies to eligible bond issuers and loan borrowers for the insurance of more than 340 green and sustainable debt instruments, extending the subsidies to cover transition bonds and loans.
In March 2024, South Korea committed $313 billion for its green financing plan, aimed to reduce greenhouse gas emissions by 40% from 2018 levels by 2030. Key features of South Korea’s green plans include policy loans to incentivise companies to transition to low-carbon production models; a dedicated green energy fund established by the Korean Development Bank and other major banks such as Woori Bank and Kookmin Bank; focusing on renewable energy programmes; a future energy fund by the Financial Services Commission to provide strategic capital financing to encourage the transition towards renewable energy; and investment in climate technologies.
