Expanding Climate-Friendly Financing in South-East Asia

Context

The Association of Southeast Asian Nations (ASEAN) region is working to develop a low-carbon and climate-adapted economy. However, this calls for a classification system to identify sustainable investments. Moreover, government regulations must be refined to promote green investments. Capital, especially from the private sector, must be mobilised for climate-friendly projects.

To achieve this, state financial regulators and institutions will need better regional coordination, as well as more expertise and awareness.

Objective

The ASEAN member states coordinate effectively and exchange knowledge on regulations. This way, climate-friendly financing concepts are spread within the financial market and private capital can be better mobilised for green investments.

Approach

The project works with ASEAN countries to improve the political framework so that more private capital flows into climate-friendly investments. The aim is to promote the transition to a low-carbon, inclusive and resilient economy.

The project’s main aspects:

• It works with ASEAN countries on regulations to develop regionally harmonised and environmentally responsible financial systems. It also promotes uniform sustainability standards in the national and regional financial sectors. This is aimed at reducing deviations and increasing cross-border investments.
• Furthermore, the project is developing a system for the region to classify green investments on the financial market, such as climate-friendly bonds and loans.
• It is setting up a regional ‘Green Bond Hub’. This dialogue platform is intended to help financial regulators and institutions to develop a market for responsible bonds and making it more effective, transparent, comparable and credible.

Last update: February 2025