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APAC Regions ESG Policy Landscape - Dec 2023 Update

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APAC Regions ESG Policy Landscape

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Global Consensus Emerged in APAC Across ESG Policies

ESG Disclosures

Key ESG policy developments are addressing disclosure obligations for both corporates and ESG and sustainability-related funds, in a bid to avoid greenwashing and promote sustainable development.

Global consensus has been observed in the approach to ESG disclosures and sustainable taxonomy. The global baseline for ESG reporting, the IFRS Sustainability Disclosure Standards ISSB - International Sustainability Standards Board S1 & S2 (“IFRS S1&S2” hereafter) are effective from 1 January 2024. An increasing number of nations in APAC have announced their plans to align with the ISSB standards for climate disclosures. Furthermore, companies are now issuing green bonds that align with the Common Ground Taxonomy, a framework co-developed by the EU and China.

Carbon Market


Voluntary carbon market (VCM) is still at an early stage, with limited sectoral coverage and low carbon pricing and trading volume observed in some regional voluntary markets. For example, Singapore and Hong Kong are both working on building the Asia’s hub for voluntary carbon exchange and launched Climate Impact X (CIX, in Singapore), and the Core Climate (in Hong Kong) respectively.

However, by close of trading on 7 June 2023, bids and offers had converged to just a few cents and seven transactions totalling 12,000 tonnes of carbon credits had traded and cleared on CIX’s first standardised contract. While Core Climate has recorded trading volume equal to only 900,000 tonnes of carbon dioxide reduction since its October 2022 debut. This is less than 1% that of the world’s leading carbon market. This is mainly attributed to the low compliance demands from businesses and concerns for the quality and double claims of carbon credits.


Recently, CIX have completed an auction to sell 250,000 tonnes of blue carbon credits at $27.80 per tonne (carbon that is naturally stored by marine and coastal ecosystems). According to Reuters News, the credits are 2021 vintage and the price was $10 per tonne, or 40%, premium to spot prices for other credits from that vintage. They were generated from Pakistan's Delta Blue Carbon Project, the world's largest mangrove restoration project.

The largest carbon market, China's compliance carbon market - the National Emission Trading System (ETS) has announced plans for an expansion to include additional major polluting sectors such as petrochemicals, chemicals, construction materials, steel, non-ferrous metals, pulp and paper industry, and civil aviation for this year's greenhouse gas emission reporting and verification work. Its national Voluntary Carbon Market - CCER, China Certified Emission Reduction program is also in preparing for a relaunch soon.

Green Taxonomies

Moreover, Green taxonomies are enabling businesses to translate long-term climate transition and environmental objectives into tangible business strategies. The Green Finance Committee has labelled the 205 existing green bonds issued in the interbank market as of August 2023 in line with the Common Ground Taxonomy, co-developed by China and the EU aligned with both the Chinese Green Bond Catalogues and the EU Taxonomy.

For instance, on August 18, Wuxi Industrial Group has successfully issued the first green bond in digital RMB in the country, “23 Xi Industrial GN010”. This is also the first green bond in the province that complies with the Common Ground Taxonomy – Climate Change Mitigation. The bond was underwritten by Ningbo Bank, with an issuance scale of 100 million yuan, a term of 2 years, and a coupon rate of 2.6%. This set a new low for bonds of the same term in the province since 2023.

The funds raised by this bond are planned to be invested in supporting the group’s photovoltaic power generation project. After the joint equator assessment, the project can reduce CO2 emissions by 379,300 metric tons per year, save 153,400 metric tons of standard coal, reduce particulate matter (dust) emissions by 8.68 metric tons, SO2 emissions by 42.36 tons, and NOx emissions by 67.87 metric tons once in full operation. This meets the requirements of the Common Ground Taxonomy and is contributing to accelerate the development and utilization of clean energy, alleviating environmental pollution, and promoting cross-border green certification cooperation.

China's Path to Sustainable Finance - Key Timelines

Financial Institutions Leading in Sustainable Finance:

In the evaluation of green banks by the China Banking Insurance Regulatory Commission and the Banking Association, ICBC ranked first. According to its 2022 TCFD report issued by the ICBC, the Bank recorded RMB 3,978,458 million in green loans issued to energy saving and environmental protection, cleaner production, clean energy, ecological environment, green upgrading of infrastructure, green services, and other green industries under the China Banking and Insurance Regulatory Commission (CBIRC) criteria. Both ranked first in the industry in terms of balance and growth.

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  • More insights on "Challenges Among Legislations for ESG Funds" can be found here More updates on "CCER Administrative Regulations Effective Now" can be found here and here

  • Also, "More Regions to Welcome Mandatory Climate Reporting with ISSB" can be found here

  • "China’s Evolving Policy Frameworks to Measure Climate Impact" is available here

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