Sustainable finance which aims at integrating environmental, social or governance criteria into financial service is increasingly gaining momentum across the world and plays a crucial role in realizing the objectives agreed upon in the United Nations’ Sustainable Development Goals (SDGs) and the Paris Agreement.
Wei Yuan, senior representative of the Sustainable Banking Network (SBN) Global Secretariat and the Coordinator for Asia Region and Measurement Working Group speaking at the launch of Roadmap for Sustainable Finance In Sri Lanka, at the Central Bank of Sri Lanka this week said that sustainable finance is reaching the mainstream of financial markets and noted that it creates more business opportunities for potential investors and institutions to finance the global transition to a low carbon future.
She noted that SBN has seen a steady growth in terms of sustainable finance reaching the mainstream of financial markets across the world over the last seven years and also added that sustainable finance initiatives led by the members of the SBN have made significant progress in directing the financial sector toward sustainability.
“However there are both opportunities and vulnerabilities for financial systems and institutions as a whole. For regulators and the industry, this involves strategies and behavioural changes both to manage risks and to mobilize capital for green and low carbon investments.” she said.
She also emphasized to need to develop policies and procedures and to update informative tools to support such behavioural changes. Quoting a report of the International Energy Agency (IEA), she said in order to limit temperature increase to two degrees Celsius, as set out in the Paris Agreement, investment in low-carbon power generation and energy efficiency should reach the US $ 53 trillion mark by 2035.
She said further that, so far 22 SBN member countries have developed and launched over 16 national sustainable polices, guidelines or voluntary principles. And all these countries are asking banks and financial institutions to take environmental and social considerations in decision making process while 11 countries have now launched green bond related guidelines.
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