New Multi-stakeholder Initiative launched to drive excellence in sustainable finance
The financial sector is crucial in creating resilient and sustainable economic growth through its ability to influence companies to adopt best practices and to direct financial flows towards sustainable development outcomes. ASFI can foster peer to peer sharing with other national sustainable finance initiatives in the region.
Sustainable finance is a critical lever to address the increasing vulnerability of the region to climate change, the degradation of land and ocean ecosystems, labour and human rights, and water risk. At the same time, the shift to sustainable economies represents around $5 trillion investment opportunities between now and 2030 in Asia alone. To support the finance sector in navigating these risks and opportunities, ASFI was developed to speed up the integration of Environmental, Social, and Governance (ESG) principles into financial decision-making, and to ensure that this leads to measurable and meaningful outcomes aligned with the Paris Agreement and the Sustainable Development Goals (SDGs).
“Today’s pressing environmental and social challenges threaten the political and economic stability of Asian economies and put the resilience of the regional finance sector at risk. By working on a multi-stakeholder basis alongside other science-based knowledge partners, we can facilitate an orderly transition to economies that deliver wellbeing to all people whilst protecting the natural capital on which all businesses and societies depend,” said Jeanne Stampe, the head of WWF’s Asia Sustainable Finance team, which will act as both a Knowledge Partner and Secretariat to the initiative.
Under the ASFI, a number of organisations – each at the leading edge in their field of sustainability or sustainable finance – will collaborate as Knowledge Partners to bring unique and innovative perspectives and capabilities to the initiative. Importantly, ASFI’s knowledge partners are creating the latest tools, research, and frameworks for sustainable finance, and will support financial institutions in the practical applications of these. In this way, ASFI can support financial institutions in delivering their commitments under global initiatives such as Principles for Responsible Investment (PRI), the Principles for Responsible Banking (PRB), Science Based Targets (SBT) and the Taskforce for Climate Related Financial Disclosures (TCFD).
The initiative will also call on strategic guidance from its Advisory Group – Singapore’s finance industry associations – to ensure ASFI’s work streams remain relevant and are aligned with industry priorities and developments.
In Malaysia, sustainable finance’s prominence is increasingly growing, with the most recent initiative announced by YB Yeo Bee Yin in November 2018, that the government is expected to introduce a green financing roadmap in 2019 with the objective of propelling Malaysia to become a green financing hub. Among other notable developments include Bank Negara Malaysia joining the Central Banks and Supervisors Network for Greening the Financial System (NGFS) in October 2018, the Securities Commission’s issuance of Guidelines on Sustainable and Responsible Investment Funds in December 2017, and the adoption of the ASEAN Green Bond Standards, ASEAN Social Bond Standards and ASEAN Sustainability Bond Standards which were developed by the ASEAN Capital Markets Forum based on the International Capital Market Association’s Green Bonds Principles in
According to Dr Henry Chan, Conservation Director for WWF-Malaysia, “Environmental risks have become more pronounced in the last decade, resulting in uncertainty and fragility in many of our world’s ecosystems. The urgency to face systemic challenges has intensified, yet we lack momentum in the progression of our sustainability journey. These complex and inter-connected challenges call for coordinated and collective action by governments, policy makers, corporations, financial institutions, science-based organisations, academia and civil society to deliver positive impact.”
With this in mind, WWF-Malaysia is working closely with the local finance sector to drive the sustainable finance agenda locally through, among others, capacity building support as well as the development and implementation of environmental and social policies and safeguards. To this end, WWF-Malaysia has made significant contributions towards the drafting of Bank Negara Malaysia’s Value-based Intermediation (VBI) Financing and Investment Impact Assessment framework. All these measures have set the pace for the Malaysian corporate and finance sectors towards sustainable business practices and sustainable finance.
Sustainable finance is extremely important for the country to achieve sustainability goals and ensure that our economy becomes resilient in the face of increasing global challenges and will be able to deliver on our sustainability commitments. In tandem with Malaysia’s commitment to the SDGs and The Paris Agreement, the Malaysian government has allocated RM2 billion for a Green Technology Financing Scheme (GTFS) in the 2019 Budget. The allocation, where the government will subsidise the interest cost by two per cent for the first five years, will be made available at selected commercial banks. In the same breath, Bank Pembangunan Malaysia Bhd will also provide a Sustainable Development Financing Fund of RM1 billion to support the SDGs.
ASFI will build on the strides that have been made thus far in developing an ecosystem for sustainable finance in Asia. As such, financial institutions are welcomed to engage with ASFI’s online resources and participate in ASFI’s activities.
“A multi-stakeholder platform such as the ASFI will pull together resources, expertise and know-how of various stakeholders needed in directing financial flows towards sustainable business practices, which is imperative in ensuring a resilient financial system, and economy. We encourage a similar initiative here in Malaysia to encourage a Corporate Malaysia that focuses on finding solutions to address environmental and social challenges,” added WWF’s Dr Henry Chan.
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For more information, please contact:
Communications Manager, Sustainable Markets Programme, WWF-Malaysia
Tel: +603-7450 3773