The Malaysian bourse has signed a Memorandum of Understanding (MoU) with Indonesia Stock Exchange (IDX) and the Stock Exchange of Thailand (SET) to set up an ASEAN environmental, social and governance (ESG) ecosystem.

The trio said in a statement on Tuesday that this MoU signifies the collective commitment of the three exchanges to explore the establishment of an inter-regional ESG linked ecosystem that drives business value creation whilst fostering sustainable development across ASEAN.

The MoU marks a significant milestone in enhancing regional cooperation and advancing sustainability in ASEAN.

It also signifies a commitment to greening supply chains, while recognizing the potential to optimize the interconnectedness and comparability of ESG data within the region.

By combining expertise and resources, Bursa Malaysia, IDX, and SET aim to collaboratively spur the adoption of good ESG practices and drive responsible growth in their respective markets, while offering cross-border opportunities related to ESG investments across the three markets.

According to the statement, the collaboration aims to identify commonalities within the ASEAN ESG ecosystem to facilitate cross-border trade, broaden business opportunities, and advance sustainable financing for corporations of all sizes and their supply chains in the region.

The three exchanges will explore a range of initiatives, including but not limited to identifying critical components of the ESG infrastructure to support companies in pursuing decarbonization and sustainability across their supply chains, and establishing a “sandbox” environment designed to facilitate trade and create new business opportunities for corporations and their supply chains, including small and medium enterprises.

They will also leverage expertise in ESG practices via workshops, training sessions, and knowledge-sharing programs to support enhancing the ESG ecosystem.

“Through this partnership, we aim to enhance cross-border cooperation and seize opportunities to harmonize ESG measures and ESG infrastructure that promotes sustainable business practices in ASEAN,

“This MoU establishes the groundwork for similar collaborations with other interested exchanges in Asia and lays a solid foundation for engaging partners from the Global North as well,” said Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia.

Meanwhile, IDX President Director Iman Rachman said that this MoU reflects the trio shared vision of creating a sustainable future for their capital markets.

“We believe that collaboration is a key in driving positive change in the region,

“We look forward to work closely with Bursa Malaysia and SET in developing innovative solutions that benefit our stakeholders, and contribute to the development of resilient and responsible companies,” he said.

SET President Pakorn Peetathawatchai also said that SET is committed to promoting ESG practices in the Thai capital market.

“This collaboration with Bursa Malaysia and IDX allows us to cocreate an interconnected ESG ecosystem, supports an integration of ASEAN markets as an asset class to attract international investors, as well as provides opportunities for knowledge-sharing, enabling us to leverage each other’s strengths to create a more sustainable future for our markets,” he said.

The signing of this MoU builds on the recent commitment among ASEAN Exchanges to standardize ten governance metrics for each ASEAN stock exchange to apply as guiding disclosure principles among respective listed companies.

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