LOCAL banks are looking for more opportunities to channel their loanable funds to projects that could help mitigate the negative effects of climate change.
In a statement on Monday, the Bankers Association of the Philippines (BAP) said it recently convened with the Asean Bankers Association (ABA), the Association of Banks in Singapore (ABS) and the World Wildlife Fund (WWF) to discuss the role of financial institutions in pushing for green financing.
Green financing is a form of investment specifically dedicated to sustainable projects that could help mitigate the effects of climate change.
According to BAP, Asia still lacks readiness and resiliency while only a handful of countries have a firm environmental, social and governance (ESG) standards.
“The evident gap at present in terms of ESG standards in the Philippines leaves us financial institutions, together with our regulators and other experts, to develop and become more resilient and climate change-conscious,” BAP President Nestor Tan said.
The BAP also noted that over the least two decades, the Philippines was among the countries mostly affected by climate change, but investments in sustainable development in the country still fall behind its regional peers. “Sustainable finance is slowly
gathering speed.
Regulators are assessing parameters in ESG; investors are now more curious about green funds; and now more banks acknowledge its feasibility and efficiency. Green lending and investment is slowly being tapped by Philippine banks,” Tan said.
The BAP said green financing in South East Asia is estimated to be valued at $3 trillion and spread around infrastructure, renewable energy, energy efficiency and food, agricultural and land use projects.
However, in the Philippines, green investment opportunity in infrastructure is estimated to be around $28 billion.
“We are on a journey to becoming more sustainable economies in the region. Dialogues are ongoing across banking industries to hopefully capture the full potential of sustainable financial markets in the region,” Tan said.
BAP said there are more dialogues in the pipeline to help bring awareness to the feasibility of sustainable financing.