Improved framework will help Asean secure funding for sustainable transition projects: Lawrence Wong


SINGAPORE – An improved framework to help Asean member states transition to a greener future will offer a clearer picture of sustainable projects that can benefit from crucial funding, said Deputy Prime Minister Lawrence Wong on Thursday.

“Climate change is obviously an existential threat for all of us… We have to reduce our emissions in order to prevent global warming from happening.

“But this process of decarbonisation is very expensive. That is why we are talking about how we can facilitate a more just and affordable transition,” said Mr Wong, who is also Finance Minister, in his opening remarks at a ministerial fireside chat in Bali about financing transition in Asean.

He is in the Indonesian island until Saturday for the ninth Asean Finance Ministers’ and Central Bank Governors’ Meeting.

Asia will be at the battlefront of the climate crisis because it is where a lot of the transition needs to happen, said Mr Wong. He cited McKinsey research showing that the Asia-Pacific will require US$3 trillion (S$4 trillion) in green financing a year to reach net-zero emissions by 2050.

The region can put in place a few building blocks to secure more green financing, he added. First, it needs more data so that financial institutions can better monitor its developments.

It must also have proper disclosures and reporting standards for greater accountability. This will assure financial institutions providing financing that there is no greenwashing – when businesses lead stakeholders into believing that their practices, products or services are more environmentally positive than they actually are.

Definitions are also important, particularly when it comes to transition projects, said Mr Wong.

“No one disputes what a green project is, no one disputes what a brown project is, but everything in between is a grey area and has a lot of question marks around it,” he said. Brown projects are not environmentally sustainable, such as those in oil and gas.

The second version of the Asean Taxonomy for Sustainable Finance was released on Monday and is an upgrade from the previous iteration launched in November 2021.

It specifies clear conditions under which the phasing-out of coal can obtain transition financing – a global first for a regional taxonomy – and also includes criteria to screen the energy sector, encompassing electricity, gas, steam and air conditioning supply.

Mr Wong said: “With this taxonomy in place, we hope it will provide clarity to investors and financial institutions on what are the transition projects taking place in South-east Asia that will allow us to move to a zero-carbon pathway, eventually.

“This will hopefully unlock more transition projects and renewable energy projects within South-east Asian countries, and also enable more cooperation of such renewable energy projects within Asean itself, potentially even as part of an Asean power grid in the future,” he said.

The bloc will eventually also have to consider how its taxonomy operates with others around the world, he said, adding: “We must ensure some form of interoperability between them, so that when a global financial institution does some financing for a transition project, (it) can be assured of certain consistency across different jurisdictions.”

Singapore will also do its part in these financing activities, said Mr Wong. “As a financial centre, we feel a role and a responsibility to do everything we can to catalyse more private financing for transition projects all over South-east Asia.”


Source link

Denial of responsibility! galaxyconcerns is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave A Reply

Your email address will not be published.