Reforms eyed to fight climate change, bring development


ALMOST half of the global emerging market economies to have initiated key financial markets reforms to drive development and fight climate change are in Asia-Pacific, according to the second Global Progress Report of the IFC-facilitated Sustainable Banking Network (SBN).
These reforms require banks and other financial institutions to assess, manage, and report on environmental, social and governance (ESG) risks in their lending operations and put market incentives in place for banks to lend to green projects.
Of the 38 countries that make up the SBN, 16 are in the Asia-Pacific, displaying a commitment within the region to sustainable finance and industry innovation.
Ten Asia-Pacific economies adopted national sustainable finance policies and voluntary principles while China and Indonesia were the only two nations globally to have progressed their sustainable financial systems to a maturing stage.
Samoa and Fiji also embraced sustainable banking.
The Central Bank of Samoa joined the SBN this year.
The central bank’s core objective was the provision of financial services to support sustainable development for Samoa.
Since joining in 2017, Fiji also made progress as part of the initiative.
The Reserve Bank of Fiji elevated sustainable finance as a priority policy area.
The report also captured the progress made by 14 countries globally to actively grow their green bond markets; and data showed increasing innovation by financial institutions to green their lending portfolios.
Across the Asia-Pacific, seven SBN member nations issued green bonds.
“SBN members have demonstrated that transforming financial markets toward sustainability is possible,” World Bank Group vice-president of IFC Georgina Baker said.
“Emerging markets are on the forefront of this shift – and SBN’s tools and guidance have laid the groundwork for more countries to follow suit.”
In addition to providing practical resources for countries undertaking sustainable finance reforms, the report also highlighted the peer-to-peer knowledge sharing of SBN members – a hallmark approach of the network.
“The report captures the real-world experience of SBN members to develop sustainable finance,” said Imansyah, deputy commissioner of International and Research, Indonesia financial services authority.
“Sharing lessons and knowledge among members has been an important catalyst to drive finance reforms, particularly as countries embark on these efforts.”
“Ultimately, SBN is about collaboration,” said Ye Yanfei, China Banking and Insurance Regulatory Commission deputy director-general.
“By bringing together regulators, policymakers, trade associations and development institutions, SBN has been able to not only turn sustainable finance policies into action and strengthen measurement to capture market impact.”
Building on the collaborative framework, SBN set up a taskforce to provide support to help countries like Mongolia, Bangladesh, Nepal, Cambodia, Pakistan and Laos to overcome their barriers to developing sustainable banking policies.