New multi-stakeholder initiative launched in Singapore to drive excellence in sustainable finance
The financial sector is crucial in creating resilient and sustainable economic growth through its ability to influence companies to adopt best practices and to direct financial flows towards sustainable development outcomes. Financial institutions have significant potential to shape resilient economies. In addition, ASFI can foster peer-to-peer sharing with other national sustainable finance initiatives in the region.
“Partnerships and collective action are essential to achieving sustainable development. With increased global recognition of the role that the financial sector has to play to achieve sustainability, The Ministry of the Environment and Water Resources of Singapore (MEWR) and Monetary Authority of Singapore(MAS) welcome the formation of ASFI which will help the financial sector advance this agenda in Singapore and the region.”
Sustainable finance is a critical lever to address the increasing vulnerability of the region to climate change, the degradation of land and ocean ecosystems, labour and human rights, and water risk. The shift to sustainable economies represents around $5 trillion of investment opportunities between now and 2030 in Asia alone. To support the finance sector in navigating these risks and opportunities, ASFI was developed to speed up the integration of Environmental, Social, and Governance (ESG) principles into financial decision-making, and to ensure that this leads to measurable and meaningful outcomes aligned with the Paris Agreement and the Sustainable Development Goals (SDGs). Vietnam is a signatory of both the Paris Agreement and the SDGs, and is one of the countries most heavily impacted by climate change.
Sustainable Finance has been at the top of the agenda for Vietnam, as the finance sector is critical to driving sustainable business practices in major sectors such as rice, seafood, energy, etc. In an effort toward establishing a green economy, the State Bank of Vietnam issued Directive Number 3 dated 24 March 2015, on promoting Green Credit Growth and Environment and Social Risk Management in credit granting activities. WWF-Vietnam has been working closely with local partners including the Vietnam Banking Association, to assist local banks in integrating E&S safeguards in their financing activities and guide them to make adequate disclosure of their progress.
‘Vietnam has made significant progress in implementing sustainable finance principles, yet there remains a huge potential for the finance sector to drive sustainable development to achieve positive environmental, social and economic outcomes. AFSI is an important initiative which provides a good platform to support financial institutions in Vietnam in achieving the Paris Agreement and SDGs by 2030.’ said Dr Van Ngoc Thinh, Country Director, WWF-Vietnam.
Under ASFI, a number of organisations – each at the leading edge in their field of sustainability or sustainable finance – will collaborate as Knowledge Partners to bring unique and innovative perspectives and capabilities to the initiative. Importantly, ASFI’s Knowledge Partners are creating the latest tools, research, and frameworks for sustainable finance, and will support financial institutions in the practical applications of these. In this way, ASFI can support financial institutions in delivering their commitments under global initiatives such as Principles for Responsible Investment (PRI), the Principles for Responsible Banking (PRB), Science-Based Targets (SBT) and the Taskforce for Climate-Related Financial Disclosures (TCFD).
The initiative will also call on strategic guidance from its Advisory Group – Singapore’s finance industry associations – to ensure ASFI’s work streams remain relevant and are aligned with industry priorities and developments.
ASFI will build off the strides that have been made thus far in developing an ecosystem for sustainable finance in Asia. In Singapore, these include the introduction of banking sector Guidelines on Responsible Financing, Singapore Exchange (SGX) sustainability reporting listing requirements for companies, the announcement of MAS’s Green Bonds Scheme and its role as founding member of the Network of Central Banks and Supervisors for Greening the Financial System, and ongoing capacity building support by industry associations for their members.
“ASFI’s Knowledge Partners look forward to working with financial institutions to further drive sustainable finance regionally, and to co-creating practical and impactful solutions that will define the resilient, thriving economies of tomorrow,” added WWF’s Jeanne Stampe.
Financial institutions in ASEAN countries, including Vietnamese banks are encouraged to tap onto the resources that ASFI provides. They can be equipped with the right tools and knowledge to better manage sustainability and climate-related risks and opportunities as well as receive updates on upcoming research, tools and activities. Individuals from Vietnamese financial institutions can sign up to apply for access to the knowledge hub on the ASFI website.
- Asia Investor Group on Climate Change (AIGCC)
- Centre for Governance Institutions, and Organizations, National University of Singapore (NUS)
- Global Canopy
- Oxford Sustainable Finance Programme, University of Oxford
- Sustainable Earth Office, Nanyang Technological University (NTU)
- UNEP Finance Initiative (UNEP FI)
- World Resources Institute (WRI)
- World Wide Fund for Nature (WWF)
- 2° Investing Initiative
- Institute of Banking and Finance (IBF)
- Investment Management Association Singapore (IMAS)
- Life Insurance Association Singapore (LIA)
- Standards – ASFI will disseminate knowledge and updates about the most meaningful and credible standards and certifications that FIs can use to drive transparency and improvement in corporate sustainability;
- Green Financial Solutions – by collaborating with progressive FIs, ASFI will support the development of innovative financial solutions that have clear positive financial, environmental, and social outcomes;
- Research & Tools – ASFI will develop research and offer practical guidance on the range of tools and resources available to bridge critical gaps in data or insights on environmental and social (E&S) risks. It will also facilitate the participation and feedback of Singapore FIs in the development of international tools and frameworks to factor in Asia related considerations;
- Regulations & Guidelines – ASFI will provide insights into the global regulatory landscape and its implications for Asia, as well as facilitate dialogue on supportive industry association guidelines;
- Assessment & Capacity Building – through workshops and trainings, ASFI aims to improve FIs’ understanding of material environmental and social issues, share perspectives on best practices, and support FIs with the implementation of tools or the development of internal policies and frameworks governing ESG practices;
- Engagement – ASFI will support investors in implementing the Singapore Stewardship Principles by providing insights and analysis on material E&S issues and facilitating collaboration among investors to develop effective engagement strategies. ASFI will also support banks in understanding investor expectations on certain and sectors.
In its current form, there are no membership fees and FIs are not obliged to make any commitments to benefit from ASFI’s events, research, and network. Individuals from financial institutions may sign up at www.asfi.asia.