Across Asia, 2021 saw the launch of a spate of products focused on environmental, social and governance issues, and green finance. The popularity of ESG product launches was matched by regulatory interest in the area. A circular from the Hong Kong Securities and Futures Commission (effective January 2022) including rules on ESG disclosure for authorized funds, and a report from the Financial Services Agency in Japan in June 2021 calling for enhanced disclosure around products' ESG credentials are examples. Following COP 26, 2021 closed with the Board of the International Organization of Securities Commissions ("IOSCO") releasing a report titled "Recommendations on Sustainability-Related Practices, Policies, Procedures and Disclosure in Asset Management" in November.
Notwithstanding regulatory developments, we expect that 2022 will see continued popularity of ESG related financial products. However, the global focus on greenwashing will likely result in enhanced disclosures and greater scrutiny of managers operating in the area. The Cayman Islands Ministry of Finance has also hinted that it is considering how it will approach this issue. So stay tuned.
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