Companies can do more to bridge South-east Asia's green financing gap: Panel

SINGAPORE – There is often an initial mismatch between policymakers’ approach to sustainable projects in emerging markets and what investors are willing to put their money into, said the International Finance Corporation’s (IFC) vice-president for Asia and the Pacific on Thursday (Sept 30).

Mr Alfonso Garcia Mora noted that green investment frameworks that resonate with investors and have clear standards that can be used across projects will help spur funding.

He told a panel discussion at the inaugural Singapore Sustainable Investing and Financing Conference that blended finance – a mix of various sources of capital to support sustainable projects in developing countries – can help reduce the risk of entering new sectors.

Sembcorp Industries group chief financial officer Eugene Cheng – who was also a panellist – said corporate-based financing such as green or sustainability-linked bonds allow funds to be deployed quickly.

Companies also need to have technical and commercial capabilities to assess whether projects are commercially viable and will generate the required returns, he added.

Fellow panellist, AC Energy president and chief executive John Eric Francia, said it is important for the term of a green bond to match a project’s investment horizon: “In the space of green infrastructure, the longer the better.”

The discussion, which was moderated by Ms Jennifer Tay, partner and infrastructure leader at PwC Singapore, was held in hybrid form and wrapped up the three-day Ecosperity Week sustainability conference organised by state investor Temasek.

Singapore’s Finance Minister Lawrence Wong said in his opening remarks at the conference that the country has potential to become a carbon services and trading hub for the region. Asean needs an estimated US$200 billion (S$272 billion) in green investments annually through 2030.

Mr Wong also called for more private sector players to seek opportunities and partnerships in blended finance to address climate change financing collectively.

He said the banking, finance and investment community plays a crucial role in facilitating investments in renewable energy solutions and carbon neutral technologies.

But he added that it needs to do more to enable the transition to a low-carbon future while investors need greater clarity about definitions of green projects to ensure these activities truly help with decarbonisation: “This will facilitate investments in such activities and help close the sizeable financing gap.”

Better data management will also help companies, financial institutions and investors measure their progress towards sustainability goals, as well as the impact of their operations and investments, added Mr Wong.


Sembcorp Industries’s group chief financial officer Eugene Cheng, Mr Alfonso Garcia Mora, vice president for Asia and the Pacific, at the International Finance Corporation, and moderator Ms Jennifer Tay, partner and infrastructure leader at PwC Singapore. PHOTO: TEMASEK

“Besides good data, we need to implement a consistent set of global standards for disclosures and reporting,” he said, noting that this will mitigate greenwashing – instances where companies and organisations give the impression they are environmentally sustainable when they are not.

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