Sydney, Australia, June 23 —A new report by the IFC-facilitated Sustainable Banking Network (SBN) shows Bangladesh, Mongolia, and Nepal have identified green finance as a top priority for sustainably developing their financial sectors.
The report— “Necessary Ambition: How Low-Income Countries Are Adopting Sustainable Finance to Address Poverty, Climate Change, and Other Urgent Challenges ”—says these countries face immediate and significant impacts from climate change, pollution, biodiversity loss, and social inequality that require urgent responses.
In the wake of the challenges, the report says in Asia, promoting green finance, such as green bonds and green loans, is particularly a focus in Bangladesh and Mongolia. The two countries, along with Nepal, are also working on developing national sustainable finance roadmaps as part of efforts to reduce market risk and incentivize green finance flows.
“At a time when low-income countries across Asia and the Pacific are being adversely impacted by COVID-19, it’s all the more vital for countries to embrace sustainable financial development to build resilience for the future,” said Nena Stoiljkovic, IFC’s Vice President for Asia and Pacific.” The report highlights these Asian countries are resolute in their commitment to promoting sustainable finance and going green in planning for the future.”
CEO and a Board Member of the Mongolian Sustainable Finance Bankers Association and Co-chair of the SBN IDA Task Force, Naidalaa Badrakh says there is positive evidence of changes in the way banks are managing environmental and social risks, compared to five years ago.
In addition to green finance, the report shows the three Asian countries are also exploring ways to expand sustainable finance to other areas such as financing for small and medium sized enterprises and agriculture.
“In the context of a circular economy, resource efficiency is key. Thus, sustainable finance has a larger role to play in poverty reduction,” said Asif Iqbal, Joint Director, Sustainable Finance Department at Bangladesh Bank, the country's central bank.
Dev Kumar Dhakal, Executive Director of the Nepal Rastra Bank, the central bank of Nepal, said "The country should develop and implement sustainable finance related policies for a better and safer financial system. These policies should not be detrimental to development activities, rather should guide the initiatives taken".
Last year, IFC’s green bonds issuance in Asia-Pacific crossed $1 billion, addressing environmental and social challenges in some of the world’s most vulnerable and poorest countries. Last month, Mongolia’s Financial Regulatory Commission and IFC signed an MoU to further develop the market for green finance in Mongolia.
About SBN
Established in 2012, SBN is a voluntary community of financial sector regulatory agencies and banking associations from emerging markets committed to advancing sustainable finance. The first global network of its kind focused on sustainable finance at market level, SBN represents 39 countries and US$43 trillion (86 percent) of the total banking assets in emerging markets. SBN members are committed to moving their financial sectors towards sustainability, with the twin goals of improved environmental and social risk management (including disclosure of climate risks) and increased capital flows to activities with positive climate, environmental, and social impact. IFC is Secretariat and technical partner, assisting members to share knowledge and access capacity building that helps them design and implement national sustainable finance initiatives. For more information, visit www.ifc.org/sbn .
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2019, we invested more than $19 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
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