Emerging Markets Insights: Sustainability Disclosure Regulations

Osmosis IM provide a high-level overview of the local regulatory landscapes in emerging markets.

This post is issued by Osmosis (Holdings) Limited, a London based investment management group. For more information, please contact Lisa Harrison on 07716 912832 or [email protected]

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.

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Important Information

Global Investors (ex US). This report is issued in the UK by Osmosis Investment Management UK Limited (“Osmosis”). Osmosis is authorised and regulated by the Financial Conduct Authority “FCA” with FRN 765056. This document is a “financial promotion” within the scope of the rules of the FCA. In the United Kingdom, the issue or distribution of this document is being made only to and directed only at professional clients (as defined in the rules of the FCA) (“Professional Clients”). This document must not be acted or relied upon by persons who are not Professional Clients. Any investment or investment activity to which this document relates is available only to Professional Clients and will be engaged in only with Professional Clients.

This document is issued by Osmosis Investment Management US LLC (“Osmosis”). Osmosis Investment Management UK Limited (“Osmosis UK”) is an affiliate of Osmosis and has been operating the Osmosis Model of Resource Efficiency. Osmosis UK is regulated by the FCA. Osmosis and Osmosis UK are both wholly owned by Osmosis (Holdings) Limited (“OHL”).

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