Ep75 Rule Shaper, Not Rule Taker: Asia's Climate Finance Leadership, ft Ha Do, KPMG

Asia's climate finance landscape is evolving rapidly. In our discussion, our guest,  KPMG's Ha Do, explores how Asian governments are shifting from policy ambitions to concrete implementation, the climate finance mechanisms proving most effective in mobilising capital, and why state-owned enterprises remain at mid-stage ESG maturity. We examine green public-private partnerships, regulatory convergence around global standards, and why Asia is increasingly positioned to shape, rather than follow, global climate finance architecture.

ABOUT HA: Ha leads the Government and Public Sector, and IDAS practice for KPMG in the Asia Pacific region. She specializes in advising central and local governments, NGOs including multilateral and bilateral development banks/agencies, state-owned enterprise groups, and relevant stakeholders (private enterprises, starts-up, etc) especially in projects and transformation across areas of infrastructure, healthcare and sustainability. Before assuming the regional roles, Ha was Senior Partner of KPMG Hanoi office, Head of Infrastructure, Government & Healthcare (IGH) Sector, Head of Environmental, Social and Governance (ESG) and Head of State-Owned Enterprises of KPMG Vietnam and Cambodia. She serves as a board director of Pacific Basin Economic Council (PBEC), an international business association that promotes cross-border trades. She also sits in the Asia Pacific Advisory Council for Global Infrastructure Project Financing Association (IPFA), a global organization for the infrastructure and energy financing industry. Ha has recently participated in the United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP)’s Financing Energy Transition program as one of their Advisors. Ha has been a long-time Governor in the American Chamber of Commerce (AmCham) Board of Governors in Hanoi. She is currently the Chairwoman of Women in Business Committee in AmCham. Ha has been a Board Member of Sustainable Finance Sector Committee (SFSC) under European Chamber of Commerce, working with various stakeholders to mainstream green business, abolish barriers, and create the conditions for green business to thrive. Ha was Vice Chairwoman of the Hanoi Business Association for the period of 2017 – 2021, and she is actively involved in promoting business of Vietnamese private enterprises. She sits on various advisory boards for non-profit organisations and runs SympaMeals with her friends, a charity fund providing free meals to poor patients in Hanoi’s cancer and heart hospitals.

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Ep75 Rule Shaper, Not Rule Taker: Asia's Climate Finance Leadership, featuring Ha Do, Partner, Head of Government and Public Sector, Asia Pacific | Head of International Development Advisory Services (IDAS), Asia Pacific, KPMG in Vietnam

Joseph Jacobelli: Good morning, good afternoon, and good evening, wherever you may be listening from. Welcome to the Asia Climate Finance Podcast, and you're listening to episode 75. Today we're diving deep into one of the most critical challenges facing our region, translating climate ambition into action. Asia is home to half the world's population and accounts for over half of global emissions.

It's also where the largest pipeline of energy transition projects is unfolding. Yet despite remarkable progress in recent years, the path from policy commitment to real world implementation remains uneven and remains complex. In this episode, I'm absolutely delighted to be speaking to Ha Do, a leading climate finance expert with deep experience working across Asia's public and private sectors.

We'll explore how governments from Singapore to Vietnam are embedding sustainability into their planning and procurement frameworks. We will examine the climate finance mechanisms from green bonds to blended finance models that are actually mobilizing capital for adaptation and mitigation projects, and we'll investigate a question that matters enormously how mature is.

ESG integration among Asian corporates and state-owned enterprises and what barriers are holding back climate aligned investment. But this conversation really goes far beyond diagnostics. We'll also look at emerging trends in green infrastructure, discussing how Asian jurisdictions are navigating the fragmented regulatory landscape around climate risk disclosure and ask a more forward looking question. Is Asia destined to remain a follower or global standards, or is the region beginning to shape the architecture of global climate finance itself?

if you find this podcast valuable, please do subscribe on Apple Podcast, Spotify, YouTube, or whichever platform you prefer. Your subscription really helps us reach more people working on climate solutions around Asia and globally. 

Now, let's dive in.

Hello. Ha. Thank you so much for making it to the Asia Climate Finance Podcast. 

Ha Do: My pleasure to be here, Joseph. Thank you for including me. Thanks a lot. 

Joseph Jacobelli: No, it's, it's really great. Especially given, your background, your expertise. It's going to be a really interesting conversation. Are you in Hanoi right now? 

Ha Do: Yeah, I'm in Hanoi. And you know what we are welcoming the autumn, now the, the, the sky is blue, light breeze, so it's absolutely fantastic time to be in Hanoi right now Joseph. 

Joseph Jacobelli: Wow. Wow. I, I wish, I wish I could join you. I wish you could join you.

Maybe, maybe next time I'll, I'll fly in during the autumn. Yes, please. So again, thank you so much for making it and, and we are going to get right into it because, it's a very broad, conversation, I guess first of all, it's really about, your experience in talking to various corporations, various governments, about what is going on in the energy transition.

So I was going to ask, how are governments, across, the Asia Pacific region actually integrating climate risk and sustainability into public sector planning and procurement frameworks, and are we seeing a shift from policy ambition to implementation? Perhaps we could just focus on a few countries. So I guess another way of saying it is, if we look at what happened, not in the last quarter or last one year, but in the last five years what has that evolution been like?

Ha Do: Thank you. Thank you, Joseph. A very interesting question and may I, start my answer by very short answer first please 

Joseph Jacobelli: Sure. Sure. 

Ha Do: We definitely see. And yes, in terms of the government across Asia, are actually moving from ambitious policies to a more concrete implementation however such a progress is not, may I say, even across the region.

We see for example, a growing set of legal rules, sectoral targets, procurement mandates and reporting tools launch in places like Singapore, Korea, Japan, and China. Why for some emerging markets especially in ASEAN that we see, such a kind of progress is in very slow because those countries the challenges in terms of capacity cost and supply market barriers. I would just move into more details, to share with you our observation on how the governments is actually integrating climate risk and sustainability and move again from policy to more implementation.

 So the first one is we see that,  governments start to embed sustainability targets in national plans and public sector commitments. , we see that many governments now actually attach the explicit emissions. Resource, use our resilience targets to public agencies. For example, building energy target, waste reductions, et cetera.

So, that makes agency responsible for internal reductions, increase demand sickness for green goods and services. One of the examples we can think of is Singapore. The, the, the Singapore coming up with the initiative that's called green government whereby they launched the cross government sustainability movement with sectoral targets.

For example, energy water waste consumption, and also launch green procurement commitments, require the reporting, for example, green mark for buildings, et cetera. So again, this is a clear shift from policy to measurable agency commitments. Another thing is we also see that the governments make the green and sustainable public procurement,  more mandatory, or they actually, if not mandatory, then they, they strongly encourage it.

So we see more and more of the laws, guidelines, regulations, and product list launched by the government to require or prioritize purchasing of low carbon, energy efficient, certified products, vehicles,  green, sustainable office supplies, green buildings, et cetera. 

Many countries actually even,  launch official list criteria or evaluation procedures to score tenders on environmental attributes.

One example I want to share is South Korea;  they have introduced the green procurement law. They also introduced what we call is 2020 Green New Deal, that use the government buying and investment to jumpstart green markets. And they also have a formal evaluation report to show,  the use of the green procurement.

For Japan, they also introduced the act on promoting green purchasing that requires the government entities to implement green purchasing. And they, they not just only require, but they also provide criteria and guidance,  which again, hack the agencies to implement such procurement requirement more easily.

On the separate point, we also see that, the governments in the region also require the climate risk assessment to be taken into account in public planning and infrastructure decisions. 

So they introduce, for example, climate risk screening for major , projects.

They introduce the national adaptation strategies. , they also integrate,  the climate proofing,  solutions into infrastructure planning. , again, another example is China,  where they introduce national climate change adaptation strategy,  whereby they strengthen monitoring early warning and more explicit requirements around green project,  and green standards in the state program.

So all of these are just introduced recently. The last but not least is we see that the government also increasingly use standards labels and building codes to actually emphasize the sustainability in the procurement. They have a public building, green rating schemes and product Ecolab bonds, for example.

And now again, an example here we wish to share is, um, courier in publish the evaluation and activity reports showing monitoring and lesson learned from the procurement, green procurement by the government. 

So, again, 

as you see all of what I just shared, the examples, et cetera, you see, like, I keep, I mean referring to Korea, Singapore, Japan, et Cetera, mean that even those we see the Asian government have moved well beyond the theoretical commitments, right?

Many countries already have laws, procurement rules, agency targets and monitoring system in place. But again, been very much focused around Singapore, Korea, Japan, China, more advanced countries, and the emerging market we still see the implementation trend is, is slow because of the challenges uh, I just shared earlier.

Thank you. 

Joseph Jacobelli: , and so, apart from China, we're really talking about developed countries. So what's happening with the Thailands, Indonesias, Philippines, Vietnams of this world? I mean, I, are they kind of at the planning stage, pre-implementation stage, or are they still just, everything is on the drawing board and, nothing much is happening. 

Ha Do: Yeah, I think Thank you. Thank you, Joseph. I think it is, it's unfair to say that we do not see much of movement in those countries. Actually we see a lot of movement and, considerable significant step introduced by the government in those countries.

For example Vietnam introduced the Vietnam Sustainability Index to actually rank the listed companies based on their sustainable commitments and activities. And, and we see similar , initiatives in countries like Thailand, Philippines, Indonesia, but unfortunately if we, compare those countries, may I say then of course we, we still see, and I think it is not just only for the Asia Pacific region, but it's the same for global picture is the advanced countries are much more active. Yes. They have more initiated launch.

The implementation is a faster pace. Um But again, the good thing is we see the countries like Vietnam, Indonesia, Philippine, Thailand on the trend, rather than there is a huge gap between those countries. Yeah. 

Joseph Jacobelli: Right. No, that, that, that, that's exactly why I was asking, because I think the general perception sometime is that, nothing much is happening , in Asia because as opposed to Europe, which has got European Union and doing in Asia, we've got Ian, it's, it's less united, so less, for lack of a better expression, advertising as to the progress that that that is happening in in in developing countries such as Vietnam, such as Thailand, such as, such as Indonesian. I think it's quite important to mention that there is movement. It's just not, not highlighted as much as places like the developed countries like Singapore and, and, and, and Japan and South Korea.

If I can just move on to talking about a little bit on, on climate finance and, and mobilization if I could. So despite growing commitments climate finance flows remain, a little bit uneven across, across Asia. What mechanisms be it public or blended are, are proving most effective in mobilizing capital for adaptation and mitigation projects.

And again, Asia is a big place, 50% of the world population. So perhaps we can just focus on, a selected few countries as an example. 

Ha Do: I, I really echo you there. Yep. The climate finance flows in Asia indeed rising. But unfortunately, they remain highly uneven. What does it mean? It means that we see climate finance is more concentrated in a few advanced or larger e emerging economies.

And disproportionately tend toward mitigation rather than adaptation in smaller, emerging markets. 

Same we see that there are several public, private and blended finance mechanism have a proven more effective than others mobilizing capital. So why don't we just go and talk first about the public finance mechanism.

The public finance tools matter because they reduce early stage risk , in private actors. The first very common one, Joseph, I'm sure that you are very familiar, which, and everybody talk about it, is the sovereign green bonds and sustainability bonds. 

They're issued widely across Asia and China, Korea, India. They are particularly effective because they build yield curve benchmarks. They are also familiar with the domestic investors, and they also had to unlock subsequent corporate bond issuance. Countries like Indonesia and Singapore use the process from the bonds for renewable energy, green transport and adaptation, for example, the coastal protection again.

 Why I mentioned about this first Joseph because these bonds provide transparent framework, have a very clear use of proceeds and the government backing element that had to remove the policy uncertainty and that's why they are such effective. Another one, may I say also have a long term run is the government backed guarantee and credit enhancement.

So we see more the passion credit guarantees and political complex insurance. And they again remain one of the most effective tools, especially for projects like renewables, energy efficiency and resilience projects. We should also not forget the role of the multilateral and bilateral development agencies here.

For example, JICA from Japan, kickin from Korea, miga, ADB. They also run, run very strong guarantee programs in the region. So this guarantee actually had to directly lower the real and also the perceived risk premium that makes the private finance expensive in especially in emerging markets.

Another one I wish to mention is around the National Green Banks or public financial institutions such as India's national Green Transition Fund Indonesia, P-T-S-M-I the Philippines Climate Resilient Local Government Unit Financing Facility. They extend long-term loans take the subordinated positions and of course offer concession and windows for adaptation.

They connect the local government needs with the capital markets, which is a major bottleneck in Asia. So, yeah, that's why I would love to, to mention about this. Now that is the, the, the public finance tools we are talking about. And we can now move on further to the blended finance.

So far what we see there are some programs that put the sound to be very effective that attract more, may I say, appetite from the private sector. 

 The first one is the concession and capital that I want to talk about. So the concession and capital are whereby we talk about the first loss, equity and the soft loans.

So, climate investment funds green Climate fund, ADB and AIIB use these concession and tools to derisk projects. Sometimes they combine with the commercial banks debts as well. We see this concession and capital reform, particularly active in projects such as grid modernization. Geo-thermal solar and storage uh, climate smart agriculture and water infrastructure.

The, the, the first loss equity act whereby, the government or that fund absorbed the early loss really had, because it, it, it had to make it viable for the banks to take product. Another one I wish to mention is the aggregation platform for disputed renewables and energy efficiency.

So this is a whereby, they, they, they provide a kind of like warehouse lending modules, and we see it quite active and pioneer in, in India and Malaysia. And such model actually has to abandon many small projects in terms of finance and small scheme projects. Joseph, I mentioned here is like rooftop solar industrial energy efficiency or some EV fleets.

So, once this portfolio because when they come in, they, they, they set this finance platform and once the platform, reach certain scale and show stable cash flow, then the private sector will come in. It would have to actually reduce transaction cost. Which again is the biggest barrier for small scale projects.

And we can also consider about resilience bonds. We see it increasingly being used in Southeast Asia, like Philippines and Pacific Island because, those are countries. They, they have a lot of typhoon hurricane. 

Joseph Jacobelli: Yes. Yes. 

Ha Do: And, and these bonds are usually issue with the support from ADB, World Bank and some of the recent risk bonds.

So this provides very rapid liquidity, post-disaster and shift risk of the government balance sheets. The last but not least, is I wish to mention about the. PPP models, the public private partnership model with Climate link risk sharing. And, and the private investor can gain more confidence in terms of long-term revenue streams because the government come in, they may provide land or viability, get funding or minimum revenue guarantee mechanism.

So, so that is, we are talking about the, the blended finance. I also want to touch a bit on the private sector mechanism that we see more kind of, drive the mobilization. For the, for the, for the climate. The first one, similar to the government bond here we talk about corporate green bond and transition bonds.

Again, they are particularly strong in China, Japan, Korea, and Singapore. And the corporate actually filling the gap where public finance is insufficient especially for decarbonizing supply chains in the projects like steel, cement, petrochemicals. We also see in ASEAN and India whereby banks in integrate more ESG performance targets into their loan pricing, so mean that they lower the interest if ESG targets are met.

That's what we call sustainability linked loans. And, and the last but not less is the carbon market and design base finance and intertech. I'm sure that you and I can have a, like one, two, or even three podcasts on the carbon market, right? Yes. Right. Yes. Yes. We should not ignore them because we, we can see like either like voluntary market or, mandatory market. Those carbon market. Actually drive investment in project like energy efficient industrial or like, greenhouse gas emission reduction. Some of the some of the how to say, reason based payment are working very well in forestry and man growth restoration in Indonesia and Vietnam.

Yeah, so those, and I'm sure that there are many more, but these are some of the, how to say, key fundamental fin climate finance tunes we observe here in the region, Joseph. 

Joseph Jacobelli: Right, right, right. Actually, you, you, you already answered the, the, the, the next question, which was about the carbon markets.

So I'll, go on to another question. You, you mentioned , private sector engagement. From your own personal perspective, your own personal experiences, Ha how mature is ESG integration among, Asian corporates particularly, with, with the state owned enterprises, which I know you work with, quite a bit.

What, what are the key barriers to scaling climate aligned investment strategies for, for, the, this kind of pride sector Asian corporates and state owned enterprises. 

Ha Do: Thank you. Joseph. It's a very interesting when you mention about state-owned companies. Mm. Because state-owned companies are very, may I say, dominant in the infrastructure sector in countries like China and Vietnam.

Of course, they also present and also play significant role in some other markets. But China and, and, and Vietnam, may I say that the leading country with the significant state own ed enterprise presence. When we mention about them, we can see that the ESG integration among that corporate, especially SOE, state owned company for, for short has improved significantly. But overall maturity is in maybe, I say generally mid stage. And when I'm talking about that, that mid stage, I want to mention about there is a clear gap between disclosure form and strategic execution or strategic substance. May I say that? Of course. Uh, we can see that market like Japan, Korea, Singapore, they are moving toward the new climate aligned capital allocation. But while many others including the state owned companies they still treat ESG largely as compliance, branding, risk avoidance rather than something strategic rather than something we can use as a kind of investment steering tool.

Of course. Yeah. I think I can share it in more details here is we talk about SOE we can see that what has been improving is we see most state owned company in China, Vietnam, Indonesia, Malaysia that the receipt, the mandatory, climate requirements for, because, those countries they actually also commit Vietnam, for example, commit to become net zero by 2050.

China has a very big campaign on energy transition, in Indonesia, very much. And Malaysia very much focused on circular economy. So the state owned company, they are not outside that trend, of course, they have to be in. And we can see that more and more of them adopt things like intermittent carbon accounting.

They expand and acquire invest in renewable energy investment. We also see that some of them green transition bonds, especially for the transportation infrastructure companies, whereby the greenhouse gas emission is a very significant 

So that is the improving, that is the very, positive side we see here.

But we see that there are seen a lot of things that lacking. For example we can see very clearly state-owned company when they, they, they adapt those things. They are mostly like, mainly driven by the national development goals because the government telling them to do so, rather than they, they, they take part as a kind of like, the driving force.

Yeah. 

For the, for all of those initiatives. And of course we can see very clearly that profitability and climate targets. Unfortunately not aligned. And those SOE, especially if you look at China, they're under huge pressure of delivering the, the good financial result. Right? So again, it is not something we can solve, or we see significant improvement over the short time.

 Another thing we can see in the SOE company is we see uh, limited board independence which shows a kind of weak government oversight because we are talking about ESG here, right? Joseph um So, yeah. And they, they, a lot of what they are doing in on also in rely on concessional or public funds.

So Joseph just to share with you in KPMG we have a sector that we call International Development Advisory Service where we focus on working with the multi and bilateral agencies. And you know what actually that sector we put under the government sector, right. Which I'm leading for Asia Pacific. You know why? Because a lot of the cases governments especially and, and state-owned companies in the region, they still have to rely on the fund from those multilateral and bilateral to implement some of their climate focus initiatives.

Rather than have their own budget to, to spend on those things. Yeah. Yeah, so, so those are the reason why my view is yeah. There is improvement but the maturity of the, of the SOE in the region is seen at the, at the very early mid stage.

Joseph Jacobelli: Yeah. I think your point is extremely important that they've got this kind of mixed targets and sometimes conflicting targets.

 The one hand they're state-owned enterprises who have to do stuff for the national good. Yeah. At the same time they've got profitability targets and sometime and, and all of a sudden on top of all the. Kind of parameters and rules, regulations, et cetera, policies that they have to follow. They, they also have to take care about climate risks, sustainability environmental, social, and, and governmental goals as well.

Yeah. So it becomes a quite complicated. And one thing that I really struggle with, and I think we, we, you and I talked about this before in Bangkok a while ago. Yeah. Which is, how do you, how do you effectively educate this state-owned enterprise? Because putting all the managers in one room and telling them, hey, guess what, climate risk is important. Sustainability is important. You have to be able to take care of these factors. That's just not going to cut it because they've got so many. Policies, so many targets to meet that it, it becomes almost impossible. So I'm not sure what, what, what the best solution is. Obviously training and education is absolutely key, but what kind of training and education can be most effective?

I've got I've got no idea right now. And I think it's, it's, it's quite complicated in, in Asia where we've got so many different languages and cultures and way of doing business. And as you know better than I do, the way you do business in Vietnam is different from Japan, is different from China, different from the Philippines.

Yeah. So, so it becomes very, very challenging. Yeah. Yeah. So, on green infrastructure that you mentioned earlier green infrastructure, also transition pathways. So, infrastructure remains central to Asia's decarbonization. And what, what trends are emerging in green public-private partnerships and how are governments balancing, energy security with their individual climate ambitions?

Ha Do: Hmm. Thank you. Thank you. Joseph is it's a very interesting question. And of course we cannot like, touch all of those in the, within the time limit of this conversation. 

Joseph Jacobelli: No, that would, that would be another 12 podcasts. Yeah. 

Ha Do: Which actually I really enjoyed so far. Thanks a lot for, oh, look, you are very, not just only interesting question but very diversified question.

Yeah. That Hopefully we have our audience to, to have a different perspective. Yeah. On the on the topic we are talking about. So yeah, just coming back to your question on the emerging trends in the PPP, and here we are talking more about the green PPP is, now, just interestingly based on the estimation by ADB , Joseph, Asia requires about 1.7 trillion US dollar per year. Yeah. Investment in infrastructure, investment to meet the, all of the climate goals and overcome the challenges. And when we talk about infrastructure we talk about sector like power, transport, water, and waste.

Especially energy. Also another one, which is a very important and of course decarbonization will be a big, target and objective. So the trend we see definitely first is there is a huge surge in the renewable energy. And it, it is which the form whereby both government and private sector come in and invest together.

And this this PPP form we can see in form of, for example,  government guarantee. State backed land preparation. So we talk about land clearance, et cetera. The government will, has come in, clear the land and then give it to the to the investor rather than the private investor have to deal with this.

It, it can also come in the form of long term power purchase agreement. And of course here we talk about some of the BOT form, right? Um Whereby at the end of the project set, when we transfer to the government by the private in investor and in exchange the government will, provide certain guarantee that we mentioned earlier.

Joseph Jacobelli: Right. 

Ha Do: So some of the sample, the good 

Joseph Jacobelli: old build, build and operate transfer model. Yes, 

Ha Do: exactly. Exactly, yes. Yeah. The, the, the build and operate and transfer model. So some of those example I just shared with you is the India solar parks PPP model whereby the government provide the transmission the land clearance via public agencies and then private developers coming in and invest in the solar set.

One of the hubs that is quite successful using that model is Butler Solar Park in India. Another one is in the Philippines whereby they have a Philippines Renewable Energy Act. And PPP Centre support whereby the PPP are used for solar parks, mold hydro, and floating solar on hydro powered dams.

For example, you may have heard of the LTA Lake PP Solar Floating Project with Meralco. Vietnam, where I'm based. Joseph, the government also think about under the WIN PPP framework still under draft now. They also look at combine the government led marine station planning with the private investor project development.

Which actually reduce the early stage risk, like permissions, license, seabed surveys, et cetera. 

Another trend we can see is a growth in the electric mobility and transport decarbonization, PPP. So we talk about government using PPP to accelerate e-Bus metro system and EV charging, uh 

Singapore, for example, they have introduced the e-Bus PPP under the Land Transport Authority. So the operators provide the fleets under the long term operating contracts. And they also built the charging infrastructure for the e vehicles. In the platform that co-invested with the government.

 Similarly , in Delhi , in India, they, they have a famous example and PPP bus procurement whereby Delhi and Bangalore introduced e-Bus under the gross cost contract. So, the private operator invests in buses, and the city pays per kilometre fee. But the last but not least trend I want to mention about is expansion of low carbon bond transport PPP like rail, metro, BRT. And those mega transport projects are structured via viability gap funding. Again, that, which is very important, right? I, I, I, I see that it's, it is really a leverage there to check if we are talking about the right scheme for the viability gap funding the land value capture, and some of the private operation and maintenance contract with the private sector.

So those are some of the PPP trend we see in the in the recent again, it, it is not like trend, but it's cross over to what I just shared is we see also some rise in the carbon capture, hydrogen and industrial decarbonization as well. Again, I will not go into the too detail, but yeah, just mention it as a kind of trend that my personal view is it will be a strong trend in the next five years.

Joseph Jacobelli: Mm. The, the, the next area and it's so far as you, as you correctly pointed out Ha, it's been a very, very comprehensive conversation. But the, the one area which I think we really need to talk about is climate risk. And, and especially climate risk disclosure and kind of like the regulatory alignment for that. Are, are Asian jurisdictions, and again, I'm being generalizing. I mean, we've got over 50 jurisdictions in Asia, so Right. I'm talking about some, some of the main ones, but are, are Asian jurisdictions converging around global standards like the International Sustainability Board or EU taxonomy equivalents?

And that, that's part one of the question. The second question is, if I could ask specifically what role is, KPMGs playing in helping, clients in general navigating these, fragmented regulatory landscape? 

Ha Do: This, my, my most favourite question, Joseph, I ask about, about and how actually we can help our clients. But yeah. Again, thanks for, thanks for the question. So, just the very short answer is, yeah. We definitely see that the Asian jurisdictions are more and more converging around the global standards. That is definitely a trend. But again, is, is has been developing slowly and again, not equally or may I say unevenly among the, the region.

Of course you many countries we are talking about here. Anyway, to cut it for short is most of the ASEAN country, we see that they are very much aligning with the ISSB. For example , they announced that they would have some adaptation or some strong alignment.

Because, the ISSB very much focus on the financial materiality, which is a very familiar criterion. May I say to investors the ISSB, I'm sure we all have heard that recently. They have integrated with TCFD, which again, very helpful. For the banks, for everyone for every stakeholder in this regard.

So for example Singapore. Singapore, the accounting and corporate regulatory authority and Singapore Stock Exchange require climate related disclosure. All aligned with ISSB S1, S2, have to start in the large Singapore incorporated companies from this year 2025. Again don't forget Joseph that Singapore is one of the earliest efficient adopters globally of this 

For, for Japan. They also follow this, but in the way whereby the Sustainability Standard Board of Japan that we usually call it for short SSSB Japan, they're also creating the local Japan standards. But those standards are actually fully based on the ISSB which are mandatory reporting for prime market companies.

And they will launch next year, Joseph. 

 Malaysia, also the same that they will facing such a kind of Malaysian sustainability reporting standards that nearly identical to ISSB. And they are facing from 2025. And in Vietnam they, they also announced that they will gradually adopt ISSB, but they now also already encourage the voluntary ISSB aligned disclosure in banking and large corporations.

Now another one that we wish to mention is the adaptation of the EU taxonomy. So may I say that Asian countries are generally. They do not copy the EU taxonomy outright. 

Yeah. And, and instead they are adopting their own green taxonomies as such taxonomies are in spite by EU and even China.

So just some of the examples. ASEAN taxonomy 2023 version two. They cover power. transport, construction, agriculture. They use traffic light system similar to the EU, green, amber, red signal, but they incorporate coal phase-out pathway that are relevant for emerging markets are something that the EU taxonomy does not have.

And, and Joseph, I think it's, it is, is smart move. You know why? Because on, you look at ASEAN, Vietnam again, where I'm based Indonesia. I think majority of their power supply has been fossil fuel based when I say coal, right, so if they, they copy EU taxonomy I'm sorry, it would not work.

Similar Singapore Green Taxonomy. They also model partly based on the EU taxonomy, but they adapt, for example, they allow gas infrastructure under strict emissions threshold. They, they support green finance for maritime and aviation because again, they are the major Singapore sectors.

They also include amber for transitional activities. 

Another example is the Japan Green Transformation Taxonomy. They support nuclear power, LNG and hydrogen ammonia, coal firing. So mean that they have some selective alignment rather than like full adaptation, identical with the EU taxonomy.

and to the second part of your question what role KPMG play. And here we are, not just talking about KPMG, of course, we are also talking about big four. Then our key roles. I can wrap it for short like we help government to map the global standards with the local regulations.

And a lot of cases we come in, and we have the government on a voluntary basis rather than we charge the government fee because we trust that this is something really beneficial for the economy to make to make the pathway for the winner contest.

We also have client and here may I say, it's a bit of bread and butter for, for KPMG. And I think for the big four as well is we help client to be in the ESG reporting system being the internal controls. We also help to provide assurance for sustainability disclosure. We had to run the decarbonization and taxonomy alignment assessment.

Of course our training not just only private sector, but institutional capacity training is something that we are doing very frequently. The last but not least is we had client to perform the risk assessment for their supply chains. Especially for the ESG.

Joseph Jacobelli: Great. I think it, it's not so much advertising KPMG because like you mentioned, the other three are doing it as well as, and, and there's also a bunch of perhaps smaller consultancies doing, doing such work as well. But it is absolutely important to try to understand exactly how clients are, meaning both governments and corporations, how are, how are they navigating this very fragmented and evolutionary kind of landscape as a regulatory landscape as well.

So, yeah, if I can just go on and move to the very last question Ha, . It's a, it's a looking ahead question, basically. Based on your experience,  and looking at the past five years, what, what are your expectations for Asia's role in shaping global climate finance architecture over the short term, meaning three, three to five years?

Are there promising sign of regional collaboration that could accelerate progress. And, and the reason specifically I'm asking that is because, based on your own experience, we we're talking about a very, very often Asia is referred to as, basically following somebody, like, following what Europe is doing as more of a, as a follower. So from that perspective, what are your expectations in terms of Asia's role? 

Ha Do: Thank you. I really like this looking ahead question. Joseph because, as we keep mentioning through our conversation so far that we are talking about 50 percent of the world population here, right?

And it means that climate finance, sustainable finance, ESG, green, all of these topics when actually see a big and significant movement in, in Asia. So having said that I think that in the next like three and five years Asia won't be positioned to become a rule shaper, rather than just a rule taker or follower in some of the key areas of the global climate finance.

And, and the reason because again, Asia accounts for more than half of the global emissions. Asia hosts the largest pipeline of energy transition projects. It also has a fast growing sustainable finance market. And here we are talking about Singapore, Hong Kong, Japan. And, and again, many Asian countries, like we mentioned earlier, that also using the National taxonomies that are actually aligned with international standards.

And they have a transition finance framework. So, so whatever they are doing in, in, in Asia I think that in, the next five years Joseph, I see that whatever a adapt and come up, which in Asia will become a kind of global norm. Yeah. Rather than, they just follow. And we don't for, we should not forget about the carbon market.

We should not forget about the Article 6 under the COP 29, right? And last but not least, don't forget please that, um, with the fast and rapid infrastructure development Asian infrastructure finance will attract significant funds from all over the globe. The Asia also is the home to AIIB, ADB, JICA, large export import bank like China, Korea, Japan sovereign wealth funds like Temasek, GIC, et cetera.

So, so that powerhouse, may I say, um That would help Asia to set norms for the blended finance and for the climate finance. That, that's, that's my view. And to the, the, the next part of your question is whether you, like we see the sign of collaboration then yeah, I have to say that there are strong signs of deeper ASEAN plus cooperation , in the climate finance. The first one is the ASEAN taxonomy I mentioned earlier. So the ASEAN Taxonomy version two is used by banks across Southeast Asia. It includes a transition category basically for emerging markets. So, who knows? I think that over, over the next three and five years they, they can become the, the factor taxonomy for developing Asia.

Right? We also see some examples for the joint carbon market development. For example, the initiated by Japan, which is called Japan Joint crediting mechanism. Which about 25 partner countries, and we see the strong activity in Indonesia, Thailand, and Vietnam.

We see there are Article 6 MOU supported by Singapore, which country like Indonesia, Vietnam, Cambodia, Papua New Guinea, Bhutan, we see the, the Thailand, Switzerland Article 6 pilot. And they already deliver some credit there. Another sign for the cooperation is the ASEAN power grid and the regional Renewable energy trade, right?

So between like Lao, Thailand, Malaysia, Singapore. So they, they are plotting piloting some cross border renewable energy trade. Brunei, Indonesia, Malaysia, Philippines, they are considering and talking about green hydrogen and ammonia corridors. So in conclusion, I'm very positive about the cooperation in Asia, especially in ASEAN Joseph.

And again I, I am the view that Asia would become, like I say, a rule setting rather than just a room following.

Joseph Jacobelli: That's great that you, you highlighted these areas of collaboration because, and I don't want this our discussion to sound all positive and, and, and cheerful and rosy.

 There's an enormous number of challenges, national challenges, cross border challenges that we are seeing with the energy transition in the Asia Pacific region. But I think that usually it's the negative stuff that makes the headlines not the collaboration or cooperation that is going on and the gradual progressive improvements.

A lot of people, especially in the west say, oh yeah, but Asia is still building, coal fired power plants, therefore nothing is happening. They're going backwards. They don't care about climate, et cetera, et cetera. And I think during this discussion we, we, we've established that there is quite an enormous amount going on.

There's just also a lot of a lot of challenges. And I was looking at one statistic, for example, that something like, 20% of if I'm, if I remember correctly, 20% of export income for Indonesia is from coal exports. So they can, pull the plug and all of a sudden, they've got 20% less income.

So it's not something that they can do over, over overnight. But agreed. That's really why we focus more on what are the developments rather than all the, all the challenges because the challenges are highlighted everywhere. 

Ha, thank you so much for your time. I think it was really fantastic conversation.

I think we, we covered an enormous amount of ground in, in the very short period of time. Like you said, it should have been on several podcasts, but I really, really appreciate your time and all of your insights. Thank you so much. 

Ha Do: Joseph, I have to thank you because you helped me to have the platform where you and I we can share to the world, right?

 More what is going on in, in Asia. And I agree with you that we cover a lot of grounds, but we cannot do it without your very insightful and sharp and comprehensive questions. So thank you again for having me, and I wish the Asia Climate Finance Podcast would continue to be successful at having more and more of this podcast in the future.

Again, thank you very much. 

Joseph Jacobelli: No, thank you. Thank you. Thank you so much. Thank you.