Having proven a link between resource efficiency and future firm value in the developed markets, Osmosis Investment Management committed resources and capital to a year-long emerging market research project, the findings of which we presented to a global audience of investors in a recent webinar.
In this follow-up article, we provide a high-level overview of the local regulatory landscapes in emerging markets and outline the prominent climate and sustainability disclosure regulations and guidelines established in key jurisdictions within the MSCI Emerging Markets Index, as of mid-January 2024.
Executive Summary
Mandatory Disclosure: We begin by looking at those countries that have obligatory sustainability disclosure regulations for all listed entities. This section highlights countries that have specific adherence to global frameworks such as the Sustainability Accounting Standards Board (SASB) or the Task Force on Climate-Related Financial Disclosure (TCFD), and stock exchanges that provide additional support to entities to ensure accurate and engaged disclosure. We will also consider the regulatory environment in Chile, South Korea, and Mexico, where mandatory disclosure does not apply to all entities, but rather to corporations or sectors which meet specific criteria.
Regional Disclosure: The article goes on to discuss regional disclosure trends, such as the nuances between Chinese reporting guidelines and the mandatory disclosure of Hong Kong-listed Chinese companies (H-shares), and an explanation of the new EU mandatory reporting requirements.
Reporting Guidelines: The last section of this article looks at guidelines published by the stock exchanges or governmental bodies of countries that do not require mandatory disclosure. These guidelines, whilst voluntary, are still crucial in understanding why disclosure rates continue to improve, and why data reported from these nations becomes increasingly reliable.