Ladies and gentlemen,
It is a pleasure to join you here at the Global Research Alliance for Sustainable Finance and Investment 2021 Conference. I would like to thank the International Institute of Green Finance of the Central University of Finance and Economics for hosting this important event.
Aligning financial markets with environmental, social and governance criteria is essential in addressing the daunting challenge faced by climate change. Concrete actions, including the financing of green and sustainable solutions, have never been more urgent. As countries prioritize a speedy economic recovery from the COVID-19 pandemic, there is a risk that financial flows are diverted from sustainable finance initiatives. It is paramount that sustainable finance remains a top priority both for government and businesses as we work towards economic recovery.
At ESCAP, we are supporting our member States through data gathering, research, capacity building and technical assistance to institute policies, mechanisms and procedures that would assist the transition to a low-carbon future. There are several innovative financing strategies and mechanisms which we are advocating, including:
Issuance of thematic bonds – specifically green bonds. There already has been a substantial rise in the issuance of thematic bonds in recent years; however, the lack of a clear framework and associated policies for issuing green bonds remains a significant barrier. Therefore, it is important that countries adopt recognized international standards and green bond frameworks such as the Green Bond Principles. It is equally important to establish methodologies to verify the environmental and social impacts of the projects financed by such bonds.
Similarly, climate risk disclosure and reporting are also critical. Incentivising investors and businesses to factor in climate risks in their decision-making allows financial flows to align with climate objectives.
Additionally, alternative innovative financing instruments such as debt-for-climate swaps have the potential to help simultaneously tackle challenges related to insufficient financial flows for climate action and debt sustainability. However, facilitating such a swap is complex. ESCAP is working with partners to analyze and identify the fundamental characteristics of success in negotiating such a swap.
In closing, it is heartening to see such a robust coalition of academic research institutions alongside policymakers and the private sector. I hope this conference will inspire debate, peer learning and action. Additionally, as this event brings together university scholars who will become future experts on sustainable finance, I hope this event inspires our youth to innovate, take action and become the leaders and climate champions of tomorrow.
I wish you a successful conference.
Thank you very much