UN Outlines 10 Principles to Close Asia-Pacific Sustainable Finance Gap
The ESCAP report states that it aims to stimulate a more informed debate among member states on key measures to move the region towards sustainability and to provide greater clarity on the benefits and consequences of selected policy and financing choices in the short and long-term
In a recent report, the Economic and Social Commission for Asia and the Pacific (ESCAP) of the United Nations outlined ten principles for action for policymakers, regulators, and the private sector for mobilising and deploying financing for significant Sustainable Development Goals, particularly concerning climate action.
By removing barriers, addressing climate risk underpricing, and decreasing sectoral and regional capital-investment mismatches, the principles will assist stakeholders in collaboratively and effectively shifting and scaling up capital to support climate action. On October 6, 2023, the “Sustainable Finance: Bridging the Gap in Asia and the Pacific” report was released. Financial support for climate action in Asia and the Pacific has lagged despite rising global emissions and energy demands because of macroeconomic difficulties and worries about the sustainability of public debt, it was underlined.
The principles put forward are:
- Developing new climate finance partnerships
- Developing effective Nationally Determined Contribution (NDC) financing strategies
- Developing policy coherence and capacities across key government ministries
- Taking decisive regulatory action to shift capital in Asia and the Pacific towards the Net Zero transition
- Driving investment in the capacities of financial personnel
- Driving investment in much-needed sectoral and project-based financial data is undertaken
- Committing to Net Zero pledges for 2050 with credible transition pathways and including 2030 goals
- Increasing local-currency financing of energy transition projects as well as green technologies and other net-zero investments
- Expanding and accelerating concessional financing and risk-sharing by multilateral development banks, bilateral development financial institutions, and public development banks
- Increasing investment of time and effort with partners in project preparation
The ESCAP report stated that it aimed to stimulate a more robust and informed debate among member states on key measures to move the region towards sustainability and to provide greater clarity on the benefits and consequences of selected policy and financing choices in the short and long term.
The research stated just 17 of the 51 Asia-Pacific nations, which are parties to the UN Framework Convention on Climate Change, have evaluated and declared their financial needs to meet their NDCs, and only seven have divided those needs into those for adaptation and mitigation.
In addition, according to ESCAP, average economic losses in the region due to natural disasters and other risks will reach USD 1.1 trillion in a moderate climate change scenario and USD 1.4 trillion in a worst-case scenario.
The analysis noted that there is enough money and liquidity to close the global funding gap in sustainable finance. However, there are several difficulties in allocating money for climate action.
