On 5-6 June in Singapore, the first ever Asia-Pacific Green Investment Catalyst and Green Finance Conference was convened, during a week of events dedicated to green and sustainable finance and innovation in the region.
The conference featured keynote speeches and panel discussions on Growing Green in Asia followed by a focused Green Investment Catalyst Roundtable on day two. The objective of the conference was to explore how Asian capital markets can be best leveraged to support sustainable and climate-aligned economic growth in the region and launch several facilities and initiatives.
Attended by over 200 private sector and public debt capital market representatives including targeted financial sector partners, the conference was coordinated by the UN Climate Change’s Regional Collaboration Centre in Bangkok (RCC Bangkok) and partner Institute for Global Environmental Strategies (IGES), in partnership with the UN Economic and Social Commission for Asia and the Pacific (ESCAP), Global Financial Markets Association (GFMA), and Asia Securities Industry and Financial Markets Association (ASIFMA).
A strong case for green was made in the opening by Mr. Masagos Zulkifli, Singapore Minister for the Environment and Water Resources as financial sector plays a key role in promoting climate action by helping investors realise there is tangible value in sustainable development. Expected revenue from a Singapore carbon tax starting 2019 of S$1 billion will also be 100% used to help industries improve energy efficiency and reduce emissions.
Mr. Hongjoo Hahm, Officer-in-Charge, UNESCAP, cautioned that the region’s least-developed countries that were highly vulnerable to climate impacts yet highly constrained by narrow fiscal space and limited public climate finance, opening up a huge opportunity for private sector climate-smart investments across the region. He said, ‘Financial regulators and legislators are recognising the need to establish green taxonomies, clarify investor duties to ensure that environmental, social and governance (ESG) factors are incorporated into investment decisions, upgrade disclosures to make climate risks more transparent, and develop sustainability standards.’
Day one centered on ways, means and opportunities to grow green investment and finance in the Asian region, with concrete examples of green bond issuance from the perspectives of corporate and sovereign issuers, local and international investors, and external opinion providers. Green loans linked to environmental performance were highlighted as pioneered by several international banks and corporations based in Asia. The discussion focused on the significant potential for climate-aligned investment and identified barriers and how these could be addressed.
Day two considered several concrete financial instruments and initiatives initiated by RCC/UNFCCC/UNESCAP together with financial sector and government partners in Cambodia, Laos PDR, Myanmar, and Thailand. Using a Green Investment Catalyst approach - a three-phase process comprising Prepare/Catalyze/Continue deals were first incubated in the run-up and discussed in an open consultative dialogue.
All the initiatives aim to increase tangible private sector investments and projects on the ground that implement countries’ Nationally Determined Contributions (NDCs) and promote investment towards low emission and climate-resilient development strategies. They include:
- Sustainability Bond Facility for Micro Finance Institutions – A bond facility for financing on lending to micro finance institutions in the region
- Syndicated Regional Green Lending Facility – A loan facility to provide mid-scale syndicated concessional loans enterprises in the region
- Green lending facility for Asia Pacific – A lending facility aimed at smaller enterprises in Asia-Pacific
- Asia Pacific Green Bond Standard and Green bond impact monitoring – An initiative to adopt a region-wide green and social bond standard, with tools to ensure continued monitoring of climate and green impact after loan or bond issuance
The initiatives were well-received among participants, several offered tangible avenues of support in moving them to the next stage of the GIC process towards accelerated implementation.
Mr. James Grabert, Director of Sustainable Development Mechanisms at UN Climate Change, commented that the GIC supports “effectively translating policies, NDCs and national roadmaps into investment pipelines of bankable projects and providing risk-adjusted long-term returns for investors.”
Mr. Grabert added, “today, we are just planting the seed but we hope that some of these initiatives will grow bigger and succeed to help transform our economies to achieving these important goals for our planet and our future generations.”
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