20% of the world’s plant, animal and marine species are residing in terrestrial, freshwater and mangrove ecosystems which makes Southeast Asia a bio cultural hotspot and therefore most important to preserve
Southeast Asia is particularly exposed to climate change such as sea level rise, heat stress, drought, flooding as well as the gradual loss of coral reefs and coastal ecosystems
84% of the current and planned fossil fuel fired power plants in Southeast Asia are incompatible with the 1.5°C target set under the Paris Agreement.
“Sustainable finance is the link between financial systems and ecosystems. Natural capital generates sustainable economic and environmental benefits that support healthy and resilient economies.”
Financial and non-financial businesses alike increasingly recognize that environmental degradation has serious long term economic and financial implications, and the understanding of climate risks in particular has increased significantly
Thus, financial regulators and banking associations have a key role to play in creating a level playing field, and in encouraging a ‘race to the top’ on sustainable finance, facilitating the financial sector’s contribution to regional sustainable development
We depend on crucial ecosystem services that are generated by natural capital assets which include forests, rivers, oceans, biodiversity and soils, valued at US$125 trillion per year, or two-thirds more than annual global GDP – services that underpin all business activities and form the bedrock of our economies.
From banks lending credit to insurers providing cover against risk, the global finance system powers the economic activities that affect our planet. Finance enables oil companies to drill in the Arctic, agribusinesses to clear tropical forests, or dams to be built across free-flowing rivers. But it’s also the key to making our homes more energy efficient, restoring landscapes, or helping small farmers to increase yields in a sustainable way.
The financial sector can and must play a key role in driving the transition to sustainable and resilient economies. By leveraging their power to shift financial flows away from unsustainable activities and towards climate-resilient business models, financial institutions can help governments achieve sustainable development and contribute overall to the preservation and restoration of natural capital.
Financial institutions have varying scopes and modes of influence, but all can encourage companies operating in the real economy to adopt science-based sustainability practices that will ensure businesses operate within planetary boundaries and contribute to sustainable development.
World Economic Forum Global Risks Perception Survey 2019-2020
For the first time in the history of the World Economic Forum’s global risk report climate related issues dominated all of the top five long term risks by likelihood among members of the Forum’s multi stakeholder community in 2020. Four of the five highest ranked risks regarding their impact are environment related issues led by Climate Action Failure.
Furthermore, the recent Global Assessment released by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) supplied clear indicators of the loss of nature and the decline of ecosystems.
Nature provides various important goods and services that enable economic production – and businesses across all sectors of the economy depend on nature.
Examples for ecosystem services are pollination, good soil, water quality and quantity management, flood and storm protection, natural pest management, or the provision of fibres and other materials. Services we often take for granted.
These dependencies represent a business risk if environmental degradation disrupts them – for companies as well as their financiers.
New business opportunities and diversified financing options arise from a new understanding of the market and changing world context and there is growing interest in the investment opportunities shaped within frameworks such as the Sustainable Development Goals, the Paris Agreement and principles of a circular economy.
Encouragingly, many investors and finance institutions are beginning to recognize the benefits of making investment decisions that help to tackle the loss of nature. Some banks are already pushing their clients to adopt stronger sustainability standards and there’s increasing interest in investments that deliver environmental and social returns alongside financial ones.
Banks play a key role in facilitating growth by providing loans for new investment and enable day-to-day business operation. With their financing decisions they can play a key role towards more sustainability in the real economy.
Work with banksUnder the lead of financial regulators, the finance sector can transform the way in which we use land and natural resources to meet society’s needs so that it becomes part of the global climate and sustainability solution.
Work with regulatorsNew business opportunities and diversified financing options arise from a new understanding of our changing world. Learn more about how financial institutions can capture these opportunities.
Smallholder financing solutionsKey production hubs for high environmental footprint commodities are located in Southeast Asia. In those markets, production requires financing from banks that can be a driver of sustainability in the real economy.
Landscape financing solutionsDuring the past years the region has observed an increasing momentum in terms of the issuance of sustainable finance guidelines and regulations.
Download report 2019
Check our interactive tool for banks to assess and benchmark their ESG
integration performance, and identify key improvement areas.
This project is part of the International Climate Initiative (IKI). The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) supports this initiative on the basis of a decision adopted by the German Bundestag.
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