In its first chapter current report introduces the expected changes in the future of finance. One area of sustainable finance that has posted dramatic growth in recent years is investing in publicly listed corporations based on environmental, social, and governance (ESG) factors. The global market for ESG exchange-traded funds (ETFs) alone is expected to expand from $25 billion to more than $400 billion within a decade. Another area seeing rapid growth is the market for green bonds—i.e., bonds issued to fund climate and environmental improvements—where the level of capital mobilized globally has risen from $87 billion to $167 billion in the last two years alone.
Nowhere is the opportunity for sustainable finance greater than in Asia.
Many Asian countries have achieved strong economic growth over a sustained period of time, and this has enabled large-scale improvements in living standards and reductions in poverty across the continent. However, this model of resource-intensive growth has created long-term risks to sustainability, and Asia faces the threat of unraveling past gains if these risks are not effectively addressed.
In the second chapter the report introduced specific areas of progress and opportunity across the four largest Asian economies in GDP Purchasing Power Parity (PPP) terms: China, India, Japan, and Indonesia. Some of these areas are already established within each country, with clear and growing signs of momentum; others might still be nascent but have the potential to develop strongly. Within each area the key factors that enable or hinder progress and highlight promising relevant innovations were discussed.
The report also contains some initial recommendations for how a range of different actors could engage across these areas of innovation, to truly realize the potential of sustainable finance. The initiatives supported by the Rockefeller Foundation are given as an example throughout the report.
The authors of this report wanted to show that the sustainable finance sector in Asia is undergoing rapid and exciting change, and in some areas moving boldly into the mainstream of finance. They believe that this truly has the potential to reshape the entire financial services sector and become the future of finance itself. However, we need to see even greater levels of innovation across Asia to truly exploit the full potential of sustainable finance.
For more information, please see the full report attached below.
The content was originally posted on https://www.fsg.org/publications/financing-future-asia
Photo Credit: ArtisticPhoto/Shutterstock.com
The views expressed in this article and the report attached are the author's own and do not necessarily reflect those of the SDG Philanthropy Platform. The SDG Philanthropy Platform is a global initiative that connects philanthropy with knowledge and networks that can deepen collaboration, leverage resources and sustain impact, driving SDG delivery within national development planning. It is led by the United Nations Development Programme (UNDP) and Rockefeller Philanthropy Advisors (RPA), and supported by the Conrad N. Hilton Foundation, Ford Foundation, Oak Foundation, Brach Family Charitable Foundation, and many others.