Bangko Sentral ng Pilipinas set to release green taxonomy, the Hong Kong Monetary Authority outlines its priorities for sustainable finance, and more in this week’s roundup
BSP seeks to strengthen sustainability agenda with green taxonomy
The Bangko Sentral ng Pilipinas (BSP) is set to issue a green taxonomy to increase transparency and attract foreign investment in mitigation and adaptation, said governor Eli Remolona. A draft version of the taxonomy was circulated in October 2023.
Speaking to the Asset, Remolona said the taxonomy development is part of a strengthened sustainability agenda in the central bank which perceives itself as an “enabler, a mobilizer, and a convenor” in accelerating financing for green projects.
The BSP has also created various climate positive regulatory initiatives, including reducing its reserve requirement rate for ESG bonds issued by banks from 3% to 0%, and introducing sustainability-related guidelines.
Meanwhile, the UK Treasury has announced further delays to its green taxonomy, which it expects to put for consultation this year. Investor groups have been critical of the Treasury’s repeated delays and lack of clear timelines.
Priorities outlined for sustainable finance in Hong Kong
A cross-agency steering group has announced its three key initiatives for capturing financial opportunities arising from the Asia Pacific region’s low carbon transition.
The group, chaired by the Hong Kong Monetary Authority, says it will focus on adapting the International Financial Reporting Standards (IFRS) for Hong Kong’s local environment, levying technology for sustainability reporting, and broadening its taxonomy to include transition finance.
A new working group has been established to develop Hong Kong’s IFRS adoption roadmap. This will address four main aspects: sustainability reporting, assurance, data and technology, and capacity building.
Julia Lueng, co-chair of the steering group, said the roadmap is a “key priority” which “requires collective action by both the public and private sectors”, including regional stakeholders.
NGFS: blended finance needed to bridge net-zero financing gaps
The Network for Greening the Financial System has published a technical document with recommendations for scaling up blended finance for emerging and developing market economies (EDME).
The report recommends increasing climate information architecture, developing a pipeline of viable and scalable projects, fostering effective risk mitigation and diversification, and aligning efforts with other stakeholders such as credit ratings agencies and ESG data providers.
According to NGFS chair Ravi Menon, “significant investment in mitigation, adaptation and resilience is needed in EDMEs” and “we need blended finance to effectively utilise public capital, reduce the risks in marginally bankable projects, and […] bridge the financing gap”.
The report also stresses the importance of a globally coordinated approach and says the NGFS will extend its blended finance efforts, which currently focus primarily on mitigation, to address adaptation in the future.
EBA: voluntary green loan label could help spur green lending
The European Banking Authority (EBA) has proposed a voluntary label for green loans based on a common EU definition.
In a response to the EU Commission’s call for advice on green loans and mortgages, the EBA said this initiative could facilitate a more active participation by banks in the green loans market.
For the labelling framework to facilitate a broader transition to a more sustainable economy, the report says it should leverage existing market practices and be consistent with other policy initiatives, such as the European green bond standard and taxonomy disclosure requirements.
The EBA report also recommended integrating a concept of green mortgages by including sustainability features in the mortgage credit directive.
Applications open for sustainability leadership fellowship
The Climate Safe Lending Network (CSLN) is now accepting applicants for its sustainability leadership development fellowship, which supports banking professionals to advance and embed climate action within their institutions.
The three-month fellowship will appoint a cohort of “courageous banking professionals who are working to catalyse a credible and just climate transition in their institution”. Successful applicants will receive training in leadership skills, insights and practical tools for actions, and peer learning and community.
According to CSLN, banks stand to gain considerable benefits from sponsoring employees to become leadership fellows, including bank culture change, insights into climate best practices and access to a stakeholder network.
Interested applicants can sign up for a taster session on 26 January. Applications close on 2 February.
Update, 18 January 2024: this article was amended to make clear that the UK’s green taxonomy consultation is expected to launch this year, not next year as previously stated.
This page was last updated January 18, 2024
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