On May 15, 2024, the Capacity-building Alliance of Sustainable Investment (CASI) held its third monthly seminar, themed "Sustainable Finance Taxonomies: Fostering Sustainable Finance and Reducing Investment Risks". Co-hosted by the Climate Bonds Initiative (CBI), the event featured experts from the Securities Commission Malaysia, Bank Indonesia, PwC China, ClientEarth, and Societe Generale.
Sean Kidney, CEO of the Climate Bonds Initiative, discussed global progress in sustainable finance taxonomies, particularly in Asia. He emphasized the urgent need to overhaul our approach to managing the planet, affecting energy systems, architecture, urban planning, and agriculture. Taxonomies offer guidance for these challenges, promising low-risk, high-return opportunities for investors. Collaboration among leading economies is crucial for this transformative change.
Nur Nadira Awang Adek, Senior Manager at Securities Commission Malaysia, discussed Malaysia's Sustainable and Responsible Investment (SRI) Taxonomy, which guides sustainable investments and climate transition financing. This voluntary taxonomy identifies activities aligning with environmental and social objectives without causing harm to other goals. The Malaysian Securities Commission plans to refine this taxonomy and align it with national and ASEAN policies.
Heru Rahadyan, PhD, Assistant Director at Central Bank of Indonesia, highlighted Indonesia's higher GHG reduction targets of 31.89% (unconditional) and 43.2% (conditional) by 2030, demanding significant financing. In 2023, Indonesia mandated Bank Indonesia to regulate sustainable finance, requiring financial institutions to prepare sustainability reports and align with international standards. Banks are encouraged to develop green bonds and support the low-carbon transition.
In the panel discussion, speakers shared perspectives on how to promote financial support for sustainable development and avoid green-washing risks. These speakers included Qing Ni, Sustainability Markets Leader, Climate and Sustainability Leader, PwC Mainland China and Hong Kong; Rachel Hemingway, Head of Transition Programmes, CBI; Danting Fan, Climate and Finance Lawyer, ClientEarth; and Amy Z., ESG Solutions & Product Strategist for Global Markets in Asia Pacific, Societe Generale. They provided insights from the angles of sustainability disclosure, transition finance development, anti-greenwashing measures, and ESG investment trends.
NI Qing highlighted the evolving global landscape of sustainability disclosure, driven by ISSB, EU CSRD, U.S. SEC, and China’s guidelines for listed companies. Rachel Hemingway emphasized credible projects in climate transitions, with policies and taxonomies guiding transition finance. FAN Danting warned that unclear guidance leads to greenwashing, undermining investor confidence. Amy Zhang noted that despite greenwashing concerns, ESG investment remains viable, with future focus on transition and impact.
