Excellency Mr. Tsuyoshi Yamaguchi, Minister of Environment of Japan,
Excellency Ms. Grace Fu, Minister of Sustainability and the Environment of Singapore,
Excellencies, Ladies and gentlemen,
It is my pleasure to deliver a keynote speech at this side event on Partnership to Strengthen Transparency for Co-innovation (PaSTI).
I note that PaSTI aims to enhance co-innovation between the government, non-state actors and the global community to improve the transparency framework for reducing greenhouse gas emissions and to achieve a country’s climate goal in its Nationally Determined Contribution (NDC).
Why is PaSTI important? Robust transparency and accountability are two key aspects of the Paris Agreement that have implications for both the government and non-state actors.
Unavailability of high-quality data and difficulties in collecting, managing and coordinating data can hinder the government’s effort to improve the accuracy of a country’s national greenhouse gas inventories.
The establishment of transparent emission measuring and reporting (M&R) systems for the private sector is an important contribution towards reaching net-zero emission targets. Such systems allow the visualization of emissions by enterprises and can assist in identifying opportunities for decarbonization technologies.
Well-developed Measurement, Reporting and Verification (MRV) systems at the national, subnational and company level are the backbone of Article 4 of the Paris Agreement on the Enhanced Transparency Framework. They support the identification of greenhouse gas emissions reduction potential as well as the development of ambitious targets.
Sharing the example of Indonesia, PaSTI supports the Ministry of National Development Planning (BAPPENAS) in developing an integrated and advanced MRV system across ministries that will be used by non-state actors to report their greenhouse gas emissions and climate reduction activities.
In general, MRV can also allow countries in the ASEAN region to track implementation and achievement of nationally determined contributions (NDC) and report on achievements.
Excellencies, ladies and gentlemen,
Regionally, MRV systems ensure methodological consistency and comparability between the nationally determined contributions NDCs and more accurate regional assessment of progress.
A report by ESCAP and partners released last week on the Ambition and Potential of NDC Commitments of the Asia-Pacific Countries has shown that with respect to transparency, or MRV, Asia-Pacific countries are generally behind.
Having said that, and based on the assessment report, countries in the ASEAN subregion scored higher than other subregions for this enabling factor and have made commitments that have created the basis for establishing a fully operational Enhanced Transparency Framework (ETF).
Singapore has earned the status of “effective” rating, while most of the other ASEAN member States are categorised as “capable” and “engaged”. Philippines and Cambodia have excelled by including a gender marker into their MRV systems.
Furthermore, the report also underlines that well-developed MRV systems are a prerequisite to gaining the trust of financial institutions and climate funds and enhancing the opportunities for access to climate finance.
For the private sector, environmental, social and governance (ESG) disclosures are gaining traction and quickly becoming the norm. ESG has been seen as a tool to attract capital, create corporate value and ESG data can also be used for internal corporate analysis and improvements.
The market is shifting rapidly, and transparency is something increasingly demanded by customers and investors.
Yet, many companies have expressed concerns over inconsistent and incomparable green standards across countries. Such fragmentation is harmful because it can impair the quality of environmental standards as countries compete to green their business sectors. For firms themselves, inconsistent green standards would push up the compliance cost.
Excellencies, ladies and gentlemen,
A transparent emission measuring and reporting system improves credibility at the national level as well, along with access to climate credits for low-carbon technology upgrades, which contributes to enhanced competitiveness in global supply chains.
It can also facilitate access to ESG funds. To access these funds, companies or governments need to pass stringent tests to ensure compliance with the ESG criteria related to environmental, social and governance factors.
Overall, such initiatives as PaSTI would lead to more robust private sector engagement with concrete climate actions to support national carbon neutrality pledges and aspirations.
Such alliances are critical for all of us to reach carbon neutrality by the middle of this century.
Therefore, this initiative of the Government of Japan is commendable and will assist the ASEAN member States in realizing higher ambitions.
ESCAP is ready to support further the implementation and promotion of the results of the PaSTI initiative for wider regional uptake.
Thank you very much.