Recently, in the context of the European Green Deal, the EU launched the first taxonomy on sustainable and environmental finance on the globe, laying the foundation for a substantial mobilization of private capital for climate change mitigation/adaptation. Based on that, the EU is currently drafting a Renewed Sustainable Finance Strategy which will further align the financial system with the EU’s sustainability goals.

Similar to Europe, regional investors in Asia pay increasing attention to ESG standards when launching new investments, largely owing to the fact that Asia is among the regions most exposed to climate change. Indeed, across Asian financial centers, awareness is rising that, by linking finance to sustainable business models, banks and investors can reduce the negative ESG exposure of their loaning and boost more accountable business performance.

However, for the moment, policy developments in sustainable finance in the EU and Asia often remain disconnected from each other. Some analysts have warned that there is a risk of fragmentation in global sustainable finance markets, hampering the flow of private capital into climate change mitigation/adaptation.

Listen to the discussions: https://www.youtube.com/watch?v=hGtUd29EKTA.