Bankers looking into green financing

Bankers in Southeast Asia are looking into green financing to combat the adverse effects of climate change in the region.

Green financing is a form of investment specifically dedicated to sustainable projects that could help mitigate the effects of climate change. Overall, Asia still lacks readiness and resiliency while only a handful of countries have a firm environmental, social and governance (ESG) standards.

The Bankers Association of the Philippines (BAP), ASEAN Bankers Association (ABA) and the Association of Banks in Singapore (ABS), together with the World Wildlife Fund (WWF) convened recently to discuss the role of financial institutions in pushing for green financing.

“The evident gap at present in terms of ESG standards in the Philippines leaves us financial institutions, together with our regulators and other experts to develop and become more resilient and climate change-conscious,” BAP president Nestor Tan said.

Green financing in Southeast Asia is estimated to be value around US$3 trillion and spread around infrastructure, renewable energy, energy efficiency and food, agricultural and land use projects. In the Philippines alone, green investment opportunity in infrastructure is estimated to be around $28 billion.

“Sustainable finance is slowly gathering speed. Regulators are assessing parameters in ESG; investors are now more curious about green funds; and now more banks acknowledge its feasibility and efficiency. Green lending and investment is slowly being tapped by Philippine banks,” Tansaid.