Association of Southeast Asian Nations

Why are we working on Sustainable Finance in Southeast Asia?

20%

of the world’s

plant, animal and marine species are home to the bio-cultural hotspot Southeast Asia

210 mio ha

of forests

is the combined forested area in, the region – of which 64 million ha are remaining primary forests

Food Production Hub

Agriculture, fisheries and aquaculture

are the main livelihood provider in most countries and the region is important for the international food supply and food security

85%

of the world’s palm oil

are exported from Indonesia and Malaysia. Fisheries and aquaculture production in the region increased by around 75% between 2000 – 2015 and is largely for export

Climate change

the region is particularly exposed to climate change

including threats, such as sea level rise, heat stress, drought, flooding as well as the gradual loss of coral reefs and coastal ecosystems

1.5°C target

Also, 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

Material environmental risk

and natural capital

Financial and non-financial businesses alike increasingly recognise that environmental degradation has serious long term economic and financial implications

“Sustainable finance is the link between financial systems and ecosystems. Natural capital generates sustainable economic and environmental benefits that support healthy and resilient economies.”

01

Located in Singapore, the regional WWF Sustainable Finance hub supports the national WWF offices across Asia, aligns the sustainable finance strategy regionally and develops regional material such as our assessment of banks and regulations.

Singapore

02

Indonesia is the first country in ASEAN with regulations on sustainable finance and green bonds. The country's Central Bank initiative to join NGFS highlights that the financial sector is increasingly expected to start integrating climate related risks into its portfolio risk management.

Indonesia

03

Malaysia's Central Bank issued a guidance document for Islamic financial institution – the Value-based Intermediation Financing and Investment Impact Assessment Framework (VBIAF). WWF is now engaged and working closely with 5 banks, and has received multiple enquiries from various other banks to support them on their sustainable finance journey.

Malaysia

04

WWF is supporting the financial sector to align with the international banking landscape in integrating ESG criteria. The team conducted first workshops with the Central Bank of Myanmar and the ASEAN Bankers Association’s on ESG criteria, risks and opportunities.

Myanmar

05

In the Philippines the Central Bank is presently preparing its policy framework for sustainable finance that covers ESG integration, risk management and stress testing for banks. Together with the Bankers Association of the Philippines WWF trains banks in incorporating ESG principles into their corporate strategy, risk management and banks' operation framework.

Philippines

06

In August 2019, the Thai Bankers‘ Association has launched the Sustainable Banking Guidelines for Responsible Lending with support of WWF Thailand. In light of the launch, 15 commercial Thai banks came together to commit to work towards making their lending practices more environmentally and socially responsible.

Thailand

US$125 trillion

Per year

is the estimated value of ecosystem services provided by natural capital assets including forests, rivers, oceans, biodiversity and soils – two thirds more than the annual global GDP

Regional harmonization

of sustainable banking practice

across ASEAN brings clear benefits, as most larger banks and their clients have operations across the region

Race to the top

Thus, financial regulators and banking associations have a key role to play in creating a level playing field, and facilitating a ‘race to the top’ on of the finance sector’s contribution to sustainable development

US$3 trillion

of green investments

is needed in ASEAN from 2016 to 2030 in sectors such as infrastructure, renewable energy, energy efficiency, food, agriculture and other land use

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.

About WWF Sustainable Finance work

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.

Global Risk Report 2020

4.0
3.40
AVERAGE
3.0
2.5
3.0
3.48
AVERAGE
4.0
4.5
Likelihood
Impact
Extreme Weather
Natural Disasters
Biodiversity Loss
Climate Action Failure
Human-made Environmental Disasters
Water Crises
Infectious Diseases
Food Crises
Involuntary Migration
Social Instability
Failure of Urban Planning
Financial Failure
Fiscal Crises
Unemployment
Asset Bubbles
Energy Price Shock
Weapons of Mass Destruction
Interstate Conflict
Global Governance Failure
National Governance Failure
State Collapse
Terrorist Attacks
Information Infrastructure Breakdown
CyberAttacks
Data Fraud or Theft
Adverse Technological Advances
Source:

World Economic Forum Global Risks Perception Survey 2019-2020

The 5 biggest risks are environmental

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.

Risks & opportunities

Risks & opportunities

New business opportunities

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.

Work with
banks

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 banks

Work with
regulators

Under 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 regulators

Smallholder
Financing

New 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 solutions

Landscape
Finance

Key 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 solutions

Sustainable Finance Regulation Report

During the past years the region has observed an increasing momentum in terms of the issuance of sustainable finance guidelines and regulations.

Download report 2019

SUSBA
Website

Check our interactive tool for banks to assess and benchmark their ESG
integration performance, and identify key improvement areas.

susba.org

WWF & IKI

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.

Who we are

World Wide Fund For Nature (WWF)

WWF is one of the world’s largest and most experienced conservation organizations, with a global network of 6000 experts across the areas most critical to global sustainable development including food systems, climate and energy, and freshwater, forests and oceans. We are active in more than 100 countries, working collaboratively with businesses, governments, and stakeholders on the ground to shift outcomes in line with global sustainable development goals. WWF is one of the world’s largest and most experienced independent conservation organizations, with over 5 million supporters and a global network active in more than 100 countries. WWF’s mission is to stop the degradation of the planet’s natural environment and to build a future in which humans live in harmony with nature. WWF’s International Finance Programme seeks to support this vision by engaging directly with banks, asset managers and other financial institutions. It helps strengthen lending and investment criteria for key industry sectors, provides insights and data on environmental and social risks, fulfils critical research gaps and helps unlock innovation breakthroughs in sustainable financial products.

International Climate Initiative (IKI)

The International Climate Initiative (ICI) is a central element of German climate protection financing and of Germany’s financing commitments under the Framework Convention on Climate Change (UNFCCC) and the Convention on Biological Diversity (CBD). ICI programmes advance innovative solutions and develop new political, economic and regulatory approaches as well as technological options and cooperation models. The solution approaches must have an impact beyond the individual project and be transferable.