visimoney
TLDR:
- Asia’s governments are increasingly promoting decarbonisation projects through green finance initiatives
- New transition finance guidance is emerging in Asian countries to provide clarity for investors and accelerate efforts to reduce carbon emissions
Summary:
Governments in Asia are taking significant steps to drive climate-transition projects through green finance initiatives. For example, Shanghai implemented a transition finance taxonomy to assist carbon-intensive firms in achieving net-zero emissions. This guidance is crucial for promoting lending for climate-transition plans. However, the multitude of guidance from various governments may lead to conflicting information, emphasizing the need for convergence.
Around 50 countries globally have introduced green and sustainable finance guidelines, and efforts are being made to ensure a global approach for consistency. China, for instance, has seen 10 provinces and municipalities establish transition plans, with several publishing guidelines on local transition-financing activities. Singapore also launched a taxonomy for sustainable finance, setting thresholds and criteria across various sectors.
Asset managers like Pimco see tremendous opportunities in Asia for transition finance, which can complement exposures in Europe and the US. Japan issued the world’s first sovereign transition bonds, signaling market receptiveness to country-specific needs for climate mitigation efforts.
Overall, Asia’s proactive stance in promoting green finance initiatives signifies a positive outlook for the region compared to other regions globally.
