This photo taken on April 23, 2019 shows a man walking past wind turbines at the Phu Lac wind farm in southern Vietnam's Binh Thuan province. (MANAN VATSYAYANA / AFP)
The private sector can play a key role in leading the green transformation in Asia-Pacific, with more support needed to address smaller businesses’ financial needs, a forum heard.
While government plays an important part in the region’s green transformation, businesses are still critical stakeholders, with power and resources to make a difference, said Tientip Subhanij, chief of investment and enterprise development at the Economic and Social Commission for Asia and the Pacific, or ESCAP.
Joseph Chan Ho-lim, Hong Kong’s under secretary for Financial Services and the Treasury, said the SAR government is working to develop the city, an international financial center, into a regional hub for green and sustainable finance
Speaking in Hong Kong on the first day of the Sustainable Investing and ESG Conference 2022 on Dec 1, Subhanij said many businesses have highly complicated supply chains that comprise an extensive network of small and medium-sized enterprises – with SMEs accounting for more than 95 percent of all enterprises in Asia-Pacific.
Organized by ESCAP and the World Green Organisation and held in both online and offline format, the two-day conference had the theme “Asia-Pacific Green Deal for Business”. The first of its kind in Asia, the Green Deal for Business is an initiative of the ESCAP Sustainable Business Network, which advocates for business leadership in implementing the United Nation’s 2030 Agenda for Sustainable Development.
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Finance remains a main barrier to businesses, especially SMEs, said Subhanij.
Citing data from the International Finance Corporation, she said 65 million enterprises, or 40 percent of micro, small and medium businesses in developing countries, have an unmet financing need of $5.2 trillion every year, while Asia-Pacific has the world’s most significant funding deficit, accounting for more than 50 percent of the global financing shortfall.
“It now comes to a very critical moment for ESG consolidation and alignment,” said William Yu, founder and CEO of the World Green Organisation, referring to the concept of ESG, or environmental, social and governance.
Yu said carbon trading is important to Hong Kong and the world, to mobilize all the efforts to combat climate change, cutting carbon emissions through the financial incentive and trading mechanism.
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Albert Ip, chairman of the World Green Organisation and senior adviser to the president at Hong Kong University of Science and Technology (HKUST), said more than 400 offices have joined WGO’s green office program. He said the program will be expanded to the Guangdong-Hong Kong-Macao Greater Bay Area to support more offices to improve workplace sustainability in the Greater Bay Area’s 11 cities in South China.
Ip said HKUST recently signed a memorandum of understanding with the Institute of Sustainability &Technology, a Hong Kong-based nonprofit organization, to promote interdisciplinary sustainability through cooperation in education and technology.
Noting there is accelerating demand for green finance globally, Joseph Chan Ho-lim, Hong Kong’s under secretary for Financial Services and the Treasury, said the SAR government is working to develop the city, an international financial center, into a regional hub for green and sustainable finance.
Chan said the government will be investing another HK$240 billion ($30.8 billion) to support a series of actions to combat climate change in the next 15 to 20 years. A pilot green and sustainable finance capacity-building support scheme will also be launched later this year to improve the talent pool in sustainable finance.
George Lam, chair of the ESCAP Sustainable Business Network, said a lot of solutions and cooperation are needed to address the big problem of plastics in the sea.
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“We need to channel more ESG investing, sustainable capital into such projects,” said Lam, adding that Asia-Pacific, if no effective measures are taken, will be the biggest polluter and emissions creator in the world by 2050.
Tim Lui, chairman of Hong Kong’s Securities and Futures Commission, said the commission is working to promote sustainability in the financial market, through combating “greenwashing” (claims that mislead investors to believe investment products are environmentally friendly), laying the groundwork to introduce standards for sustainability reporting, and developing a regulatory framework to support carbon market development.
Noting the promising outlook for the Chinese mainland’s carbon market, Lui said Hong Kong can play a strategic role as a financial and risk management center.
Glenda So, co-head of markets at Hong Kong Exchanges and Clearing (HKEX), said the company has been working to create a finance ecosystem to help finance a low-carbon and sustainable economy.
Besides introducing ESG reporting guidelines as early as 2013, So said there are more than 60 ESG and green-related bonds listed on HKEX this year, raising over $26 billion as at the end of October. In addition, it welcomed Hong Kong’s first carbon futures exchange-traded funds in March and launched the international carbon marketplace Core Climate in October.
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During the conference, experts, investors and business leaders also held discussions on topics such as corporate supply chain engagement and sustainability reporting standards, ESG development and sustainable finance instruments, and resilience, carbon neutrality technologies and economic growth.
Albert Oung, founder and president of the World Green Organisation and chair of the ESCAP Sustainable Business Network’s Green Economy Task Force, said in advancing green transformation it is not the technologies that are lacking, but the higher purpose that needs to be applied to businesses.
“Through the Asia-Pacific Green Deal, (we can) find these successful practitioners, let them share with us how they did it … so we can embrace all these things together and find a new solution,” said Oung.
