On 15 September 2022, Sustainability Forum 2022, which was co-hosted by Tsinghua University School of Economics and Management (Tsinghua SEM), London Business School (LBS), Asian Infrastructure Investment Bank (AIIB), and organized by the Institute for Global Development at Tsinghua University (Tsinghua IGD), was held online.
The main topic of discussion was "Global Disclosure Standard for Sustainability: Assessing Progress and Implications for Asia". Policymakers, academic experts, and market participants in Asia gathered online to discuss sustainability-related issues in-depth and to share feedback on the first set of draft international Sustainability Disclosure Standards (ISDS) published by International Sustainability Standards Board (ISSB) and their impact on the Asian market.
Speakers at Sustainability Forum 2022
Bai Chong-En, Mansfield Freeman Chair Professor and Dean of Tsinghua SEM, and Executive Deputy Dean of Institute for Global Development at Tsinghua University, François Ortalo-Magné, Professor and Dean of LBS, and Jin Liqun, President and Chair of the Board of Directors of AIIB, delivered welcome speeches. The session was moderated by Professor Xiao Xing, Head of Accounting Department, Tsinghua SEM.
In his speech, Bai Chong-En pointed out that sustainable development is a global issue that requires urgent action from all parties. Universities can actively participate in research, exchange, education and outreach. Tsinghua SEM is actively conducting research on key issues related to global development, offering ESG and sustainability courses, encouraging students and entrepreneurs to think environmental- friendly, and advancing the close collaboration between business, academia, and research to spur technological innovation. According to Bai Chong-En, in order to achieve the carbon neutrality goal and sustainable development, all societal sectors must cooperate, share ideas internationally, pool their knowledge, coordinate their efforts, and reach a consensus. This forum will be an excellent place to start.
Bai Chong-En
François Ortalo-Magné shared his opinions on ESG disclosure from a research standpoint in his address. He emphasized that ESG disclosure has significant ramifications for businesses, the investment community, regulators, and consumers, and he cited research from the London Business School to demonstrate how crucial ESG disclosure is to reducing the problem of corporate green-washing and facilitating the market's information flow.
François Ortalo-Magné
Jin Liqun stated that the triple planetary crises that human society is currently experiencing—climate change, biodiversity loss, and pollution—requires urgent global agreement and decisive action. AIIB is built upon the strong foundations of clear intentionality, as demonstrated by three enduring values: Lean, Clean and Green. The AIIB is dedicated to supporting economically and socially viable infrastructure projects in Asia, with a target of ensuring that 50 percent of overall approved financing by 2025 will be directed toward climate finance. Jin Liqun also stressed that AIIB has been committed to transparency, integrity and accountability from day one.
Jin Liqun
Xiao Xing
Emmanuel Faber,Chairman of International Sustainability Standards Board (ISSB), gave the keynote address to introduce ISSB and its first proposed set of Sustainability Disclosure Standards. The session was moderated by Qian Xiaojun, Professor at Tsinghua SEM, Associate Dean of Schwarzman College and Director of Research Center for Green Economy and Sustainable Development of Tsinghua University.
The ISSB has been given the new mission of the International Financial Reporting Standards Foundation (IFRS) to promote sustainable disclosure as an important role in creating a comprehensive global benchmark standard for sustainable disclosure to meet the information needs of investors when assessing the value of companies. Mr. Faber began his presentation by reviewing the history of the ISSB's creation, noting that the ISSB has been tasked with this mission. Countries from all across the world have already provided feedback on the first exposure drafts, covering topics including industry standards, standard implementation, and disclosure down the value chain. In the upcoming phase, the ISSB will compile and analyze the input in order to improve convergence and interoperability with the standards of the EU and the US, according to Faber. Faber concluded by offering three pieces of guidance to players in the Asian market: get ready early to seize opportunities and attract capital; learn more from one another, particularly by utilizing digital technology to empower companies to transform green; and concentrate on capacity building and actively engage in international benchmarking.
Emmanuel Faber
Qian Xiaojun
In the session "Thoughts form Policy Makers", Zhu Guangyao, former Vice Minister of the Ministry of Finance of the People's Republic of China and Trustee of the IFRS Foundation, Erkki Liikanen, Chair of the IFRS Foundation Trustees, Tu Guangshao, Board Chairman of Shanghai Finance Institute, Former Vice Chairman of China Securities Regulatory Commission and Former Vice Chairman and President of China Investment Corporation, and Zhu Min, Vice Chairman of the China Center for International Economic Exchanges, Former Deputy Managing Director of the International Monetary Fund and former Deputy Governor of the People's Bank of China, delivered their keynote speeches. The session was moderated by Bai Chong-En, Mansfield Freeman Chair Professor and Dean of Tsinghua SEM, and Executive Deputy Dean of Institute for Global Development at Tsinghua University.
Zhu Guangyao stressed in his speech the importance and wide-ranging ramifications of the creation of an international sustainability disclosure standard. In order to be universally accepted by all parties as a comprehensive sustainability reporting standards, the international sustainability disclosure guidelines must be a comprehensive, objective, and universal set of high requirements. There is still space for improvement in terms of the inclusion, science, and universality of the standards based on the two exposure drafts that have been released thus far and the feedback that has been received. Last but not least, Zhu Guangyao expressed his gratitude for the IFRS's active promotion of strategic transformation and expansion into the field of standard-setting for sustainable disclosure. He added that China will actively support and participate in the development of international sustainable disclosure standards and help create a set of high-quality global benchmarks for sustainable information disclosure.
Zhu Guangyao
Erkki Liikanen asserted in his address that the three pillars of the response to climate change and global sustainable development are corporate transformation, public policy, and disclosure of climate risk and opportunity. As a result, the institutional framework required for the creation of international sustainability disclosure requirements has been established. Liikanen emphasized the significance of developing nations' involvement in raising international standards and declared that the IFRS Foundation would make it easier to put the rules into practice at the local and national levels through widespread international collaboration.
Erkki Liikanen
Tu Guangshao explained the fundamental situation of the development of a sustainable information disclosure system and guidelines for listed companies in China in his speech. He noted that sustainable information disclosure for listed companies in China has been actively promoted, with a focus on content that is more green and low-carbon, on domestic and international exchanges and integration, and on communication between the government and the private sector. Tu Guangshao believes that the next step is to establish the fundamental idea of fusing the realities of China and the rest of the world, and to gradually and organically combine overall development with targeted promotion and voluntary and required disclosure, in addition to doing a good job of constructing the infrastructure of data, information quality, and industry self-regulation.
Tu Guangshao
Zhu Min discussed his findings and ideas on sustainable disclosure from five angles. First, fragmentation will be a problem on a global scale. Second, industry disclosure transformation programs are a crucial building block for the financial sector's transformation. Third, disclosure frameworks and policies are required from a global perspective. Fourth, it's critical to hear the concerns of SMEs and comprehend the difficulties they face. Fifth, it is crucial to establish an effective PPP model and build a platform that is more beneficial and common to both sides. According to Zhu Min, in order to create a genuinely international standard through collaborative efforts, China must continue to engage closely with the ISSB and the IFRS Foundation.
Zhu Min
The main forum was followed by two sub-forums.
Erik Berglof, Chief Economist of the Asian Infrastructure Investment Bank (AIIB), presided over the first sub-forum, which had the theme "Feedback from Academia" and featured four academics who shared their opinions and engaged in in-depth discussion.
He Kebin, professor of School of Environment at Tsinghua University and Dean of the University's Carbon Neutral Institute, argued that the research and adoption of new energy technologies are essential steps toward achieving carbon neutrality and sustainable development.
Jong Dae Kim, professor of College of Business Administration, Director of the Green Finance Graduate Program, and Director of the ESG Centre at the Sustainability Management Research Institute at Inha University in Korea shared feedback and responses from Korean financial regulators and standard-setters on the ISSB guidelines as well as the impact of international standards on Korean businesses.
The construction and growth of China's green financial system, as well as its connection to transformational finance, were thoroughly discussed by Ma Jun, President of Institute of Finance and Sustainability and Co-chair of the G20 Sustainable Finance Working Group.
While legal systems and public policies are national, capital markets are global, according to Lucrezia Reichlin, Professor of Economics at the London Business School and Trustee of the International Financial Reporting Standards (IFRS) Foundation. Since ISSB is a standard-setter and not an implementer, it is crucial to engage in dialogue with national standard-setters and regulators.
Clockwise from top centre: Erik Berglof, HE Kebin, Lucrezia Reichlin, Ma Jun, Jong Dae Kim
Four panelists participated in the second sub forum, which had the title "Views from Market Participants" and was moderated by Teresa Ko, Corporate partner and China Chairman, Freshfields Bruckhaus Deringer and Co-vice chair of IFRS Foundation.
Zhang Weiguo,Visiting Professor in Management Practice at Tsinghua SEM, Former Board Member of International Accounting Standards Board (IASB), Former Chief Accountant and International Director of China Securities Regulation Commission, argued that ISSB standards should focus more on thematic or topical standards than industry requirements and not be aligned with any specific code.
While disclosure standards are being developed quickly, Hideki Kanda, Emeritus Professor at University of Tokyo and Professor of Law at Gakushuin University, noted that assurance standards must be developed because audit or assurance is crucial to guaranteeing the quality and comparability of such disclosures.
Sanjeev Singhal, Chairman of Sustainability Reporting Standards Board of the Institute of Chartered Accountants of India (ICAI) and Chairman of ICAI Auditing &Assurance Standards Board, shared feedback from Indian stakeholders regarding the ISSB standards and the adoption of local Business Responsibility and Sustainability Reporting (BRSR) standards in India.
Yvonne KAM, Technical Services Partner, PwC China and Former Member of the Chinese Accounting Standards Advisory Committee of the Ministry of Finance of the People’s Republic of China, stressed the significance of creating a unique set of standards for small and medium-sized businesses in developing economies and those without public accountability.
Clockwise from top centre: Teresa Ko, Zhang Weiguo,Yvonne KAM, Sanjeev Singhal, Hideki Kanda
Nearly 500 online participants from more than 20 different nations and regions participated in the six-hour-long conference. As they actively represented the views of Asian politicians, academics, and market participants through their insights and ideas, participants furthered the construction of high-quality, clear, and widely embraced sustainable disclosure standards.
