UN launches 10 principles to close Asia-Pacific sustainable finance gap

A new report by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) has put forward 10 principles for action for policymakers, regulators and private finance for mobilising and deploying financing for key UN-mandated Sustainable Development Goals, particularly around climate action. 

The principles will help stakeholders cooperatively and efficiently shift and scale up capital to finance climate action by reducing obstacles, addressing climate risk underpricing, and reducing sectoral and regional capital-investment mismatches. 

Read more: Run up to COP27: Only a quarter of global climate finance flows into Asia; much of that in loan

The Sustainable Finance: Bridging the Gap in Asia and the Pacific report was launched October 6, 2023. Even as global emissions and energy needs rise, financing climate action in Asia and the Pacific has lagged due to macroeconomic challenges and public debt sustainability concerns, it noted.

The principles put forward are:

• Developing new climate finance partnerships 
• Developing effective NDC financing strategies
• Developing policy coherence and capacities across key government ministries
• Taking decisive regulatory action to shift capital in Asia and the Pacific towards the Net Zero transition
• Driving investment in the capacities of financial personnel
• Driving investment in much-needed sectoral and project-based financial data is undertaken
• Committing to Net Zero pledges for 2050 with credible transition pathways and including 2030 goals
• Increasing local-currency financing of energy transition projects as well as green technologies and other net-zero investments
• Expanding and accelerating concessional financing and risk-sharing by multilateral development banks, bilateral development financial institutions, and public development banks
• Increasing investment of time and effort with partners in project preparation

The ESCAP report stated that it aimed to stimulate a more robust and informed debate among member states on key measures to move the region towards sustainability and to provide greater clarity on the benefits and consequences of selected policy and financing choices in the short and long term.

Read more: Despite growing demand for climate fund, nations fail to agree on replenishment process

Only 17 of the 51 Asia-Pacific countries party to the UN Framework Convention on Climate Change have assessed and reported their financial needs to meet their Nationally Determined Contributions and only seven have broken down financial needs between adaptation and mitigation, the report said. 

Furthermore, average economic losses in the region from disaster-related and other natural hazards are expected to rise to $1.1 trillion in a moderate climate-change scenario and $1.4 trillion in a worst-case scenario, ESCAP added.

There is sufficient capital and liquidity to close the global financing gap in sustainable finance, the report noted. However, deploying capital for climate action faces a number of challenges.

Read more:

• Over $9 trillion investments in infrastructure resilience, Net Zero needed by 2050 to mitigate climate impact: CDRI
• Least developed countries set expectations for COP28 with Dakar Declaration

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