Why are we working on Sustainable Finance in Southeast Asia?

20%

of the world

Southeast Asia can be considered a bio cultur al hotspot encompassing around 20 percent of the world’s plant, animal and marine species residing in terrestrial, freshwater, and mangrove ecosystems.

US$3 trillion

In ASEAN, an estimated US$3 trillion of green investments is needed from 2016 to 2030 in sectors such as infrastructure, renewable energy, energy efficiency, food, agriculture and land use.

Climate change

Southeast Asian countries are also particularly exposed to the physical impacts of climate change, such as sea level rise, heat stress, drought, flooding as well as the gradual loss of coral reefs and coastal ecosystems.

210 million hectares

Combined, the region is home to 210 million hectares of forest of which 64 million hectares are remaining primary forests.

Food supply

and main livelihood provider

ASEAN region is highly dependent on natural resources, with agriculture, fisheries and aquaculture being the main livelihood provider in most countries and is important for the international food supply chains food security

85%

Indonesia and Malaysia export over 85 percent of the world’s palm oil. Fisheries and aquaculture production in the region largely for export increased by around 75 percent between 2000 and 2015.

01

The Indonesia Central bank joins the NGFS to mark that the financial sector is expected to start integrating climate related risks into its portfolio risk management. The Indonesia Financial Services Authority has issued a regulation on SF and green bond as a good starting point towards the sustainable finance implementation.

Indonesia

02

Worked with the Central Bank in preparing the Value-based Intermediation Financing and Investment Impact Assessment Framework (VBIAF) – Guidance document for Islamic financial institution Appointed as Technical Experts for 3 ESG sector guidances under the VBIAF. WWF is now engaged and working closely with 5 banks, and has received multiple enquiries from various other banks to support them in their sustainable finance journey.

Malaysia

03

WWF is supporting the financial sector to align with the international banking landscape and conducted first workshops with the Central Bank of Myanmar and a workshop with ASEAN Bankers Association’s (ABA) Permanent Committee on Co-operation in Finance, Investment Trade and Technology (COFITT) in regards to the ESG criteria and sustainable finance.

Myanmar

04

The Bankers Association of the Philippines ( in collaboration with the World Wide Fund for Nature (encouraged banks to incorporate environmental, social and governance ( principles into their corporate strategy, risk management and bank operations framework. The Central Bank BSP is presently preparing the policy framework for sustainable finance to cover the integration, stress testing and risks for banks’ ESG.

Philippines

05

Located in Singapore, WWF Asia Sustainable finance centre of excellence develops and co-execute our regional Sustainable Finance strategy together with dedicated sustainable finance experts in WWF offices across Asia.

Singapore

06

In August, the Thai Bankers‘ Association has launched the Sustainable Banking Guidelines – Responsible Lending with the support of WWF TH as a technical partner. In light of the launch, 15 Thai commercial banks come together to work towards making their lending practices more environmentally and socially responsible.

Thailand

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

High dependence

On natural ressources

ASEAN region is the high dependence on natural resources, with agriculture, fisheries and aquaculture being the main livelihood provider in most countries and is important for the international food supply chains & food security.

Clear benefits

The harmonization of sustainable banking practices across ASEAN brings clear benefits, as most regional banks and their clients have operations across the region.

US$125 trillion

Per year

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(, these services underpin all business activities and form the bedrock of our economies.)

Race to the top

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.

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.

Implications

Economically and financially

Financial and non-financial businesses alike increasingly recognise that environmental degradation has serious long term economic and financial implications, and the understanding of climate risks in particular has increased significantly

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

Growing awareness about environmental risks

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.

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.

Landscape
Finance

This website is aimed at banks, banking regulators and banking associations in ASEAN.

Work with
regulators

Together with science based NGOs, the finance sector can transform the way in which we use land to meet society’s needs so that it becomes part of the global climate solution.

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.

Work with
banks

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.

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.

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.

SUSBA
Website

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