The role of central banks in scaling up sustainable finance: What do monetary authorities in Asia and the Pacific think?

This paper presents the findings of a survey among 18 central banks from Asia and the Pacific regarding their views on and policies regarding sustainable finance. It also reviews recent developments in selected Asia and Pacific countries concerning sustainable finance to illustrate the actions that monetary and financial authorities have already taken to address climate and environmental risks, and to scale up sustainable finance. The survey results indicate that this is a topic of growing importance and relevance to monetary authorities in the region, with many of these countries being particularly severely affected by the effects of climate change. The vast majority of survey respondents believe that they should be playing a key role in promoting green finance and sustainable funding options, either through amending the regulatory framework, encouraging green loans and products, or introducing climate change considerations in their monetary and financial policy operations. A number of central banks and supervisory authorities are already promoting sustainable financing options explicitly or implicitly. While most respondents did not believe that current regulatory frameworks implicitly support high-carbon industries, several are initiating beneficial capital provisions or regulatory frameworks to encourage banks to scale up lending to low-carbon industries. Most of the respondents are yet to develop capacity building or training programs for their staff or the external financial community, although a number of initiatives are underway.