Despite strong growth in the past several quarters, the weakness of the developed countries will eventually erode their dynamism, a situation that is already apparent in some countries. However, unlike the developed economies, the emerging world has more space to implement economic policies that help mitigate the effects of the worsened external scenario. Chile has this capacity too. Actually, according to several international assessments, Chile is among the best suited to confront such a scenario. Our country has made progress in recent decades to build an economic policy framework, which has already given proof of its capacity to properly deal with a difficult conjuncture. If necessity demands it, we have the capacity to adopt the necessary measures to mitigate the effects of the global crisis on our economy. The lessons learned from the experience of 2008–2009 give us a positive edge. The external impulse that our economy will be receiving in the coming quarters will be smaller than we thought just a few months back. However, we must not forget that still our relative position in the world is favorable. We have managed to diversify the destinations of our exports and China is now our main client. The copper price and the terms of trade, although not as good as some months ago, are still high from a historical perspective. Our country risk is low and, although our external financing cost has risen in recent weeks, it is still lower than it was in previous years ago.
The IFRS Foundation plans to set up by the end of this year an International Sustainability Standards Board (ISSB) as a global standard setter. An IFRS work group is already developing a prototype climate reporting standard. The IFRS work group’s recommendations on the prototype will be reviewed by a technical expert group co-chaired by MAS and the US Securities and Exchange Commission, under IOSCO’s Sustainable Finance Taskforce. The expert group will assess if the prototype could be a basis for developing the ISSB’s standards. MAS and SGX will set out roadmaps for mandatory climate-related financial disclosures by financial institutions and listed entities respectively. The roadmap will take a phased approach. A more ambitious timeline can be considered for listed entities that are larger or more exposed to climate risks. Larger financial institutions can similarly be prioritised. These details will be worked out in consultation with the industry in the coming months. SGX will soon consult the industry on making climate-related reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). SGX already subjects listed entities to annual sustainability reporting on a “comply or explain” basis, but without specifying any particular framework for them to follow. The TCFD recommendations provide a good baseline disclosure framework. They have gained broad acceptance internationally and will be the basis for future ISSB climate reporting standards. MAS will consult the industry later this year on mandatory climate-related disclosures by financial institutions.