Asifma Agreement among International Underwriters

The Asia Securities Industry and Financial Markets Association (ASIFMA) announced a new agreement among international underwriters in May 2021. This agreement aims to promote sustainability and responsible investment practices in bond issuance throughout Asia.

Under this agreement, international underwriters who work with ASIFMA member firms will be required to adhere to certain environmental, social, and governance (ESG) principles. This includes providing guidance to issuers on ESG reporting, disclosing their own ESG policies, and adhering to relevant international conventions and standards.

This agreement is significant for several reasons. First, it demonstrates a growing recognition of the importance of sustainability in the financial industry. As more investors prioritize ESG factors in their investment decisions, issuers are under increasing pressure to demonstrate their commitment to sustainability. By requiring underwriters to uphold certain ESG standards, ASIFMA is helping to ensure that issuers in Asia can access capital while also meeting the demands of investors.

Second, the agreement represents a step forward for sustainable finance in Asia. While sustainable finance has been gaining ground in other regions, such as Europe, it has been slower to catch on in Asia. By promoting responsible investment practices among underwriters, ASIFMA is helping to create a more sustainable financial ecosystem in the region.

Finally, the agreement is notable for its collaborative approach. By working with international underwriters, ASIFMA is leveraging the expertise of market participants to promote sustainable finance. This collaborative approach is likely to produce better outcomes than a purely regulatory approach, as it allows for the exchange of ideas and best practices.

Overall, the ASIFMA agreement among international underwriters is a positive development for sustainable finance in Asia. By promoting responsible investment practices and collaboration among market participants, this agreement has the potential to create a more sustainable and resilient financial system in the region.