Fostering green finance for sustainable development in Asia
Placing Asian economies onto a sustainable development pathway requires an unprecedented shift in investment away from greenhouse gas, fossil fuel, and natural resource-intensive industries toward more resource-efficient technologies and business models. The financial sector will have to play a central role in this green transformation. Important aspects of green finance are sustainable investment and banking, where investment and lending decisions are made based on environmental screening and risk assessment to meet sustainability standards, as well as insurance services that cover environmental and climate risk. Against the backdrop of climate change vulnerability and the need to reduce carbon emissions, huge investments in green and climate-resilient infrastructure are needed across the region. Review the state of green lending and investment in Asia and provide an overview of green financial governance initiatives across Asia. Also identify market innovations to increase green finance in Asia as well as barriers to green investments and financial policy. Based on an analysis of current developments in Asia in the financial markets and in the regulatory sphere, highlight priority areas for enhancing the scope for green finance in Asia.