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December 8, 2022

Regulatory Round-up: GRI’s biodiversity standard, China’s green bond loophole

By Victor Smart

The Global Reporting Initiative, the international sustainability reporting standards organisation, has launched a consultation on an update to its ‘biodiversity standard’. This has been designed to inform companies’ response to a deepening “biodiversity crisis” and address their impacts. Feedback is welcomed until February 28 2023.

The UN-supported Principles for Responsible Investment has launched what is claimed to be the largest collaborative stewardship initiative on human rights and social issues. More than 220 investors collectively representing $30tn in assets under management are involved in the Advance project. 

The US Federal Reserve Board has called for feedback on a proposed framework to help large banks with more than $100bn in total assets manage both the physical and the transition risks related to climate change. The high-level framework is intended to help financial institutions incorporate climate-related risks into their current risk management. The consultation runs until January 31 2023.

The Institute for Energy Economics and Financial Analysis has warned investors about China‘s “problematic” use-of-proceeds loophole for state-owned enterprises (SOEs) issuing green bonds, which is the consequence of regulatory fragmentation in the Chinese market. Despite the progress made through the China Green Bond Principles, IEEFA said investors to “remain cautious” around investing in onshore Chinese green bonds due to the ongoing compliance gap for SOEs, which include “coal-dominated” power producers, are still allowed to allocate up to half of green bond proceeds to non-green projects.

The Asia Securities Industry and Financial Markets Association has called on Asian companies to commit to gender diversity across the whole workforce. Its Investors’ ESG Expectations report on gender diversity said that, while progress is being made across many countries in the region, “diversity needs to go beyond a compliance mindset of merely meeting mandatory regulatory requirements or targets”. 

The Monetary Authority of Singapore is encouraging the public to go green this coming Lunar New Year by using pre-used banknotes or digital “e-hong baos”. The central bank issues around 100mn new notes annually for festive periods such as the Lunar New Year, a large majority of which are used only once for gifting, returned to the central bank, then destroyed as surplus to demand.

 

A service from the Financial Times