Green financing in Asia: False momentum or real impact?

(Eco Business, 17 Oct 2018) At least US$2.5 trillion annually is needed to achieve the SDGs, but investing in climate and sustainable development projects can be perceived as risky business by traditional investors. Experts at the Responsible Business Forum offer pointers on how to get financiers on board.

While green investments have been growing globally and certainly in Asia, in the wider finance universe it has been more talk than action, said panelists at the Responsible Business Forum in Singapore on Friday. 

“We’re on the cusp of driving blended finance for sustainability, but there’s this false sense of momentum,” said Helene Li, co-founder of upcoming investment platform GoImpact, which connects investors and other stakeholders interested in impact investing. 

While there is no lack of capital or the intention for this capital to be channelled into funding projects to achieve the United Nations’ Sustainable Development Goals (SDGs), hype alone will not mobilise the private sector into providing the US$2.5 trillion needed yearly to fund their attainment.

Speaking to Eco-Business on the sidelines of the forum, Petra Daroczi, ESG ambassador, Thomson Reuters, who moved to Asia a year ago, found the lack of awareness about green financing shocking. 

Asian investors are afraid that sustainable investments offer smaller returns, said Daroczi, who works with them to integrate environmental and social factors into investing practices. “Their philosophy is that if they can get a 15 per cent return from a coal mine, they’d rather do that than take 10 per cent from a sustainable rubber plantation.” 

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Eco Business, 17 Oct 2018: Green financing in Asia: False momentum or real impact?