KUALA LUMPUR, May 12 (NNN-Bernama) — Green and social finance must be nurtured to ensure that Asia and the Pacific’s recovery from the COVID-19 pandemic is inclusive, resilient, and sustainable, said Asian Development Bank (ADB) economist Dr Shu Tian.
She said governments should use policies to support the development of social and green finance — a financing instrument designed to promote environmental and social goals.
“Governments can use a range of policies to shape social and green finance and participate in them. Typical options include legislation, regulation, as well as various fiscal instruments.
“It is especially important now because the government revenues have collapsed during the pandemic, while countries are finding it hard to pay for needed green and social investments,” she told a webinar on ADB’s Asian Development Outlook (ADO) 2021 themed ‘Financing Green and Inclusive Recovery’, Wednesday.
Shu Tian said green and social finance has grown rapidly in recent years, especially in the private sector.
She noted that over US$30 trillion, or one-third of global assets, were now under management guided by environmental, social, and governance considerations.
“Firms are using green and social finance to hedge sustainability risks, attract patient investors, and gain greater resilience to shocks.
“While high-income economies still dominate the market, developing Asia is the leader among emerging markets in green, social, and sustainability bonds,” she said.
ADB, in the ADO 2021 findings on ‘Financing Green and Inclusive Recovery’, urged governments to use regulations that enforce common standards for information disclosure and impact measurement which can help ensure that green and social finance is effective, sustainable, and attractive, especially for the private sector.
The report also outlines several financing tools that can promote a green and inclusive recovery, including stimulus packages, microfinance, and carbon pricing.
— NNN-BERNAMA
