IFC, a member of the World Bank Group, and SSE hosted a webinar on the importance of corporate disclosure and transparency to help companies in Asia Pacific attract financing and boost their resilience amid challenges posed by the COVID-19 pandemic.
More than 400 participants from 42 countries, including representatives from central banks, stock exchanges, universities, and companies attended the “Going Beyond the Balance Sheet: Disclosure and Transparency Webinar.” The first of the Asia Pacific ESG Advisory webinar series, the event was organized in partnership with the United Nations Sustainable Stock Exchanges Initiative (SSE), a network of 96 stock exchanges and regulators.
“Investors need accurate and reliable information to make sound investment decisions, particularly in emerging markets where governance is at times weak and inherent risks are high,” said Vivek Pathak, IFC’s Regional Director for East Asia and the Pacific. “It is therefore critical for companies to improve their disclosure and transparency. This will inspire confidence in investors, thereby encouraging them to consider adding those companies to their investment portfolios. Subsequently, this will help these countries build strong local capital markets and a thriving private sector.”
Built on the “Beyond the Balance Sheet: IFC Disclosure and Transparency Toolkit,” the webinar provides practical step-by-step guidance to help emerging market companies report better to investors and other key stakeholders. The award-winning toolkit is a collaborative effort involving more than 100 representatives of development partners and key capital market players, such as investors, regulators, stock exchanges, asset managers, and index providers.
“The training materials used in this webinar will be especially helpful in elevating disclosure and transparency standards in emerging markets,” said Emilio B. Aquino, Chairperson of the Philippines Securities and Exchange Commission. “Responsible corporate reporting not only allows companies to better mitigate risks and prepare for crises such as future pandemics, but also brings in additional value to the companies, making them more attractive to investors.”
This is the first time IFC is introducing this toolkit in Asia Pacific. The aim is to help companies develop comprehensive integrated annual reports that incorporate relevant environmental, social, and governance (ESG) information increasingly sought by investors. Banks can also use this toolkit to support their valuation and credit analyses, while regulators and standard setters can use it for designing ESG disclosure, and transparency codes and guidelines.
“The number of markets with formal guidance on ESG disclosure has more than tripled in the last five years to the point where today more than half the stock markets in the world have explicit expectations that companies produce high-quality ESG disclosure,” said Anthony Miller, Coordinator of the United Nations Sustainable Stock Exchanges initiative. “IFC’s technical assistance on ESG disclosure is an important contribution toward helping firms meet market expectations of the 21st century.”
The topic has attracted widespread interest among participants from Asia to Africa, Europe, and the Americas. In Asia Pacific, regulators and business leaders from Australia, Bangladesh, Cambodia, China, Hong Kong SAR, Fiji, India, Indonesia, Japan, Malaysia, Mongolia, Myanmar, Nepal, New Zealand, Pakistan, the Philippines, Singapore, Thailand, Timor-Leste, and Vietnam took part in the event.
Since 2018, IFC — in partnership with SSE — has been spearheading efforts to enhance ESG disclosure and reporting globally. Using IFC’s toolkit and SSE’s guidance, many countries, including Georgia, Iraq, Kazakhstan, Kenya, Peru, the Philippines, and Rwanda, have already launched national ESG reporting guidelines. Companies around the world are also using the tools to prepare annual reports.
Webinar Summary
IFC, a member of the World Bank Group, attracted 400 representatives of central banks, stock exchanges, universities and companies from 42 countries in East Asia and Pacific (EAP) for the first EAP environmental, social and governance (ESG) advisory webinar “Going Beyond the Balance Sheet” on the importance of ESG disclosure and transparency.
The seminar was organized in partnership with the United Nations Sustainable Stock Exchanges Initiative (UN SSE), a network of 96 stock exchanges and regulators.
Opening remarks by Vivek Pathak, IFC’s Regional Director for East Asia and the Pacific, introduced the award-winning “Beyond the Balance Sheet” toolkit as a source of practical guidance for improved disclosure and transparency (D&T) practices and the importance of the collaboration with UN SSE. “I greatly look forward to many more East Asia Pacific countries adopting these tools to help their companies become more attractive to investors,” he said. Referring to the COVID-19 pandemic, he stated, “It is absolutely critical” for companies to communicate with investors and stakeholders about how they are managing the crisis. Transparency of the highest standard will differentiate how companies come out of this pandemic.”
Presentations from IFC panelists, Robeco Group and the Indonesia Investment Fund addressed questions about the business case for disclosure and transparency and how companies build resilient enterprises in the new environment.
Challenges for investors include gaining access to high quality, comparable information. ESG transparency is often the starting point for change, leading to better risk informed investment decisions and better risk-adjusted returns. Companies are advised to increase forward-looking strategy information in their reporting (25% or more), linking strategic ESG objectives to governance and performance information. Investors are looking for value creation, and they want to be able to trust the company, its leadership and its activities. The performance report allows companies to tell their story beyond the balance sheet. IFC works holistically with companies, investors and regulators, and in partnership with the UNSSE, to demystify and streamline ESG reporting practices. IFC’s step-by-step guidance for integrating ESG into strategy, governance and performance helps companies to progress from basic reporting practices to international standards.
Next steps include using AI technologies to make these tools and progressive approaches available on a dynamic Disclosure and Transparency platform to help companies develop comprehensive integrated reports that incorporate the ESG and financial information, to reach as many as possible. The EAP ESG team is looking forward to rolling out the local translations of the toolkit (much interest from the chat), launching the D&T Platform and working with clients (both stock exchanges and companies) in collaboration with UN SSE.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2019, we invested more than $19 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
