Sustainability Policies and Practices for Corporate Governance in Asia

Annex A. Methodology for data collection and classification

In this report, Asia as a region includes the following 18 jurisdictions: Bangladesh, Cambodia, China, Hong Kong (China), India, Indonesia, Japan, Korea, Lao PDR, Malaysia, Mongolia, Pakistan, the Philippines, Singapore, Sri Lanka, Chinese Taipei, Thailand and Viet Nam. The report follows the IMF classification of advanced economies and emerging and developing economies. Advanced Asian economies include Hong Kong (China), Japan, Korea, Singapore and Chinese Taipei, while emerging and developing Asian economies include Bangladesh, Cambodia, China, India, Indonesia, Lao PDR, Malaysia, Mongolia, Pakistan, the Philippines, Sri Lanka, Thailand and Viet Nam.

A. Listed companies

The information presented in Section 1.1 of Chapter 1 is from LSEG. The dataset contains information for listed companies as of the end of 2022.

Cleaning process

The raw financial dataset contains all security observations listed on each stock exchange. The following cleaning steps are applied:

• Firms listed on an over‑the‑counter (OTC) market are excluded

• Firms listed on a multilateral trading facility (MTF) are excluded

• Security types classified as “units” and “trust” are excluded

• Security types identified as “REITs” and “investment funds” are excluded

• Firms identified as delisted are excluded

• For firms with multiple observations but different countries of domicile, their true country of domicile is manually checked to remove duplicate observations

• For firms listed on several stock exchanges, only the primary listing is kept

Industry classification

The industry analysis is based on the LSEG Business Classification. The economic sectors used in the analysis are the following:

 

LSEG Economic Sector
Basic materials	Industrials
Cyclical consumer	Consumer non-cyclical
Energy	Technology
Financials	Real estate
Healthcare	Utilities

B. Ownership data

The main source of information is the FactSet Ownership database. This dataset covers companies with a market capitalisation of more than USD 50 million and accounts for all positions equal to or larger than 0.1% of the issued shares. Data are collected as of March 2023 in current USD, thus no currency nor inflation adjustment is needed. The data are complemented and verified using LSEG and Bloomberg. Market capitalisation information for each company is collected from LSEG. The dataset includes the records of owners for 30 871 companies listed on 92 markets covering 98% of global market capitalisation. For each of the economies/regions presented, the information corresponds to all listed companies in those economies/regions with available information.

The information for all the owners reported as of the end of 2022 is collected for each company. Some companies have up to 5 000 records in their list of owners. Each record contains the name of the institution, the percentage of outstanding shares owned, the investor type classification, the origin country of the investor, the ultimate parent’s name, among other things.

The table below presents the definitions of the five categories of owners used in this report. In many cases, when the ultimate owner is identified as a Government, a Province or a City and the direct owner was not identified as such, ownership records are reclassified as public sector. For example, public pension funds that are regulated under public sector law are classified as government, and sovereign wealth funds (SWFs) are also included in that same category.

 

Investor category	Categories of owners
	Investor type
	Private corporations and holding companies	Business Association	Operating Division
Employee Stock Ownership Plan		Private Company
Holding Company		Public Company
Joint Venture		Subsidiary
Non-profit organisation
Public sector	Government	Regional Governments
	Sovereign Wealth Manager	Public Pension Funds
Strategic individuals and family members	Individual (Strategic Owners)	Family Office
Institutional investors	Bank Investment Division	Mutual Fund Manager
	Broker	Other
	College/University	Pension Fund
	Foundation/Endowment Manager	Pension Fund Manager
	Fund of Funds Manager	Private Banking/Wealth Management
	Fund of Hedge Funds Manager	Private Equity Fund/Alternative Inv.
	Hedge Fund	Real Estate Manager
	Hedge Fund Manager	Research Firm
	Insurance Company	Stock Borrowing/Lending
	Investment Adviser	Trust/Trustee
	Market Maker	Umbrella Fund
	Mutual Fund-Closed End	Venture Capital/Private Equity
Other free-float including retail investors	Shares in the hands of investors that are not required to disclose their holdings. It includes the direct holdings of retail investors who are not required to disclose their ownership and institutional investors that did not exceed the required thresholds for public disclosure of their holdings.

C. Corporate sustainability data

This firm-level dataset contains records for up to 13 800 listed companies with a total of USD 113 trillion market capitalisation listed on 83 markets in 2021, although the coverage may vary depending on the selected issue. The main data sources, LSEG and Bloomberg, were controlled against each other to ensure consistency. The disclosed data contains information on sustainability reporting and the used accounting standards, the external assurance of sustainability reporting, the presence of a sustainability committee reporting directly to the board, GHG emission reduction targets, and executive remuneration linked to sustainability factors and targets. Sustainability disclosure by trusts, funds or special purpose acquisition companies was excluded from the sample under analysis.

D. Sustainable corporate bonds data

Green, social, sustainability and sustainability-linked bonds are mainly collected from LSEG and Bloomberg. This dataset contains deal-level information on more than 7 000 bonds issued by both financial and non-financial companies from 73 countries between 2013 to 2022. The dataset contains a detailed set of information for each sustainable bond issue, including the identity, nationality and industry of the issuer; the type, interest rate structure, maturity date and rating category of the bond, the amount and use of proceeds obtained from the issue. The issuance amounts, initially collected in USD, are adjusted by 2022 US Consumer Price Index (CPI). The different data sources are checked against each other to ensure consistency and the bonds are classified into four different categories: green bonds, social bonds, sustainability bonds and sustainability-linked bonds. Sustainable bonds issued by agencies, governments, treasuries, central banks, universities or other supra-national entities are excluded from this analysis.

E.  MSCI data

The MSCI data has been retrieved from the equity index constituents disclosed by MSCI, and the data has been updated as of March 1, 2023. This dataset contains the security name and their weight in each index. For each security in the equity index, the relevant information regarding industry and market capitalisation is collected from LSEG. REITS and investment funds are excluded from the indices.

F. Sustainability Accounting Standards Board Materiality Map

The information on market capitalisation exposed to selected sustainability issues uses the Sustainability Accounting Standards Board (SASB)’s Materiality Map (© 2023 IFRS Foundation. All Rights Reserved.). The materiality map has 26 general sustainability issues that are most likely to materially impact the financial condition or operating performance of companies across 77 industries. Using this materiality map, the SASB Sustainable Industry Classification System (SICS) Taxonomy (© 2023 IFRS Foundation. All Rights Reserved.) creates a company-level dataset classifying companies according to financially material sustainability issues that they are facing. Figures provided in Section 1.2 of the report benefits from this information. By combining this information with the relevant market capitalisation of these companies, the figures summarise the market capitalisation of selected sustainability issues by regions and jurisdictions exposed to different issues. The Organisation for Economic Co-operation and Development (OECD) licenses the SASB Standards Disclosure Topics.