United Nations Environment Programme Finance Initiative (UNEP FI), the ASEAN Capital Markets Forum (ACMF) and the Sustainable Finance Institute Asia (SFIA) are beginning a new collaboration to mobilize greater adaptation finance for ASEAN.
According to UNEP’s latest Adaptation Gap Report, developing countries require between USD 215 billion and USD 387 billion annually by 2030 to meet climate adaptation needs. Currently, only around USD 21.3 billion is available each year, highlighting a significant funding gap.[1] While ASEAN has made commendable strides in recognizing and addressing climate adaptation challenges, further efforts, including increasing funding and investments toward building resilience, are essential.[2]
This new collaboration complements and enhances the ASEAN Taxonomy—the first regional transition-specific taxonomy—by developing a regional adaptation guide in identifying activities and measures critical for adapting to, and building resilience against, climate-related and natural hazards while considering mitigation co-benefits. This initiative includes the development of the mitigation co-benefit and Adaptation for Resilience (mARs) Guide to enhance usability and functionality of the ASEAN Taxonomy for Sustainable Finance (ASEAN Taxonomy). This will be carried out under the broad umbrella of the ASEAN Taxonomy Board’s work, of which ACMF is a member.
“The mARs Guide project comes at a critical time, as countries throughout ASEAN are experiencing the physical impacts of climate change and the corresponding costs of trying to prepare for, withstand and rebuild from those impacts,” said Dato’ Mohammad Faiz Azmi, Chairman of the Securities Commission Malaysia, which currently chairs the ACMF. “We look forward to working with UNEP FI, the ATB, ACMF members and SFIA to develop a guide for identifying, classifying and providing a better understanding of adaptation measures to help catalyze public and private sector finance for these vulnerable countries.”
“Since 2018, UNEP FI has been exploring how the finance sector can build resilience to physical climate change impacts while supporting society and the economy in adapting to these challenges,” said Laura Canas da Costa, Global Policy Co-Lead at UNEP FI. “Sustainable finance taxonomies are key in providing a common language for this purpose. A regional adaptation-focused guide has great potential to enhance the ASEAN Taxonomy and direct capital toward investments that strengthen climate adaptation. We value our collaboration with ACMF and SFIA on this vital endeavor.”
“Our mitigation efforts need to be supported by adaptation action as climate change impact is increasing,” said Eugene Wong, Chief Executive Officer of SFIA. “A guide to help providers and users of finance, as well as those charged with taking action on adaptation, identify the technologies and approaches that capital should be oriented to achieve the paradigm shift needed will enhance the impact of the ASEAN Taxonomy in supporting the region’s sustainability agenda.”
About
ASEAN Capital Market Forum (ACMF): The ACMF is a high-level grouping of capital market regulators from all 10 ASEAN jurisdictions, namely Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. The ACMF’s primary goal is to develop a deep, liquid and integrated regional capital market.
ASEAN Taxonomy Board (ATB): The ATB was set up in 2021 under the auspices of the ASEAN Finance Ministers and Central Bank Governors’ Meeting (AFMGM) and is jointly driven by the ACMF, ASEAN Insurance Regulators Meeting (AIRM), the Senior Level Committee on Financial Integration (SLC) and the Working Committee on Capital Market Development (WC-CMD). Its establishment is a response to the call at the 6th AFMGM to work towards “furthering a cohesive sustainable finance agenda cutting across banking, capital markets and insurance areas at the ASEAN Finance Ministers’ Meeting and AFMGM respectively, with greater coordination amongst the relevant ASEAN working committees.”
Securities Commission Malaysia (SC): SC was established on 1 March 1993 under the Securities Commission Act 1993 (SCA). It is a self-funded statutory body entrusted with the responsibility to regulate and develop the Malaysian capital market. Its mission is to promote and maintain fair, efficient, secure and transparent securities and derivatives markets; and facilitate the orderly development of an innovative and competitive capital market.
Sustainable Finance Institute Asia (SFIA): The SFIA is an independent institute established to catalyse ideas on Sustainable Finance at the policy level, as well as propel action in support of those policy ideas in Asia, particularly in ASEAN. It aims to provide thought leadership and act as a one stop centre for Sustainable Finance in ASEAN through collaborations with governments, regulators, central banks, multilateral development banks, industry, academia and non-governmental organisations.
UNEP Finance Initiative (UNEP FI): UNEP FI brings together a large network of banks, insurers, and investors that collectively catalyzes action across the financial system to deliver more sustainable global economies. Convened by a Geneva-based secretariat, more than 500 banks and insurers with assets exceeding USD 170 trillion work together to facilitate the implementation of UNEP FI’s Principles for Responsible Banking and Principles for Sustainable Insurance, as well as three UN-convened net-zero alliances. Financial institutions work with UNEP FI on a voluntary basis, and UNEP FI helps them to apply the industry frameworks and develop practical guidance and tools to position their businesses for the transition to a sustainable and inclusive economy.
[1] UNEP (2024). Adaptation Gap Report 2024: Come hell and high water, 7 November 2024.
[2] ASEAN (2023). Sixth ASEAN State of the Environment Report, 2023.
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