Asia Sustainable Finance Update Dec 2021

Sustainable finance is on the rise everywhere on the planet and Asia is no different. The development of sustainable finance in Asia can be outlined through a framework describing taxonomies, disclosure, incentives, risks and products. The number of taxonomies is on the rise, this could lead to market segmentation, lack of transparency and increased transaction costs. Disclosure is very important in ensuring market transparency and ensuring that green money gets to the right green projects. Incentives are then required to attract private investment towards green projects. Climate risk analysis in Asia is a relatively new concept but is developing rapidly, there have been new requirements for banks to conduct climate risk analyses and report the results. Finally, product innovation in Asia has been very high. There has been a massive growth in green bond issuance recently, as well as an increase in the variety of products on offer in Asia.