Sustainable Finance and Green Recovery
Southeast Asia is highly vulnerable to the effects of climate change and yet the region has witnessed one of the highest increases in carbon dioxide (CO2) emissions. In the post-COVID-19 economic recovery, it is critical for countries to meet their Nationally Determined Contributions (NDCs) under the Paris Agreement, and continue an economic shift to a low-carbon model.
The financial and other sectors of the economy must be engaged to match policy intervention and address current gaps in meeting NDC commitments as well as embedding long-term sustainability trajectory in country-specific strategies. A resilient and low-carbon economic growth will require increased transparency and high-quality sustainability disclosure from companies under globally recognized sustainability reporting frameworks. Transparency is a tool that corporations and financial institutions can use to identify risks and opportunities, shifting investment practices to green and sustainable initiatives.
With funding from the UK PACT Green Recovery Challenge Fund, we are partnering with CDP to deliver a capacity building program for corporates and financial institutions in Indonesia and Thailand to:
- Address knowledge gaps in climate-related sustainability disclosure and its financial implications;
- Establish environmental, social and governance (ESG) best practice for social inclusion and human rights; and
- Encourage the adoption of green and sustainable finance.
The program will equip beneficiaries with knowledge on disclosures that recognize financial risks and opportunities associated with climate change and ESG practices and facilitate the use of disclosed data to identify green and sustainable finance opportunities.
Its overall goal is to contribute to emissions reduction and green and inclusive economic recovery through a shift in capital flows towards low-carbon activities and enhanced disclosure capacity and transparency.
The Sustainable Finance & Green Recovery program runs from February 2021 to January 2022. Some of the results and resources produced so far are listed below:
- To enhance Indonesian companies’ understanding of sustainable finance and ESG reporting, GRI and CDP conducted a policy review of the GRI Standards and CDP’s Task force on Climate-related Financial Disclosures (TCFD) aligned framework against BAPPENAS’ (Indonesian Ministry of National Development Planning) SDGs Action Plan and Indonesia's Regulation on the Application of Sustainable Finance and other national regulations.
- In April 2021, with collaboration from the Stock Exchange of Thailand and the Indonesia Stock Exchange, GRI and CDP carried out a baseline survey with publicly listed companies and financial institutions. In addition, a Multi-stakeholder Advisory Panel (MAP) was formed in Indonesia. Panel members included the national SDGs Secretariat, Indonesia Business Coalition for Women’s Empowerment, Indonesia Global Compact Network, and the International Council of Small Business-Womenpreneur Community Semarang. The results of the conducted policy review, the outcomes of the baseline survey and feedback collected from the MAP fed the design and implementation of the planned capacity-building program.
- GRI and CDP hosted four beginners' workshops between May and June 2021: two for Thai and two for Indonesian beneficiaries. GRI’s content focused on presenting the policy review and pathways to sustainable business and the SDGs, and CDP focused on introducing the TCFD. In total 550 participants attended the workshops.
- Building on the beginners’ workshops, in June 2021 GRI and CDP hosted four advanced workshops in Thailand and Indonesia on sustainability and SDG impact measurement and on climate-related scenario analysis and climate-risk assessment. In addition, GRI provided training on how corporates can align impacts and SDGs with key performance indicators (KPIs). The workshops were attended by 671 participants.
- In October 2021 GRI and CDP held four advanced workshops in Indonesia and Thailand on the topics of greenhouse gas emission risk assessment and greenhouse gas emission accounting.
- As a follow-up to the workshops, participants were provided with technical support on best practices in strategy development under TCFD, engagement with supply chains and ESG. In Indonesia and Thailand, GRI organized five coaching sessions on ‘Developing SDG Action Plans on Gender Equality, Sustainable Supply Chain, and Climate Action’ for companies, providing technical guidance on how companies can align their sustainability focus areas with relevant indicators to inform and shape their future SDG strategies and plans communicated in future sustainability reports.
- An online COP26 event was held on 3 November 2021, themed 'Climate Action to Shape a Sustainable Financial System'.
- To support the sustainable stock exchange initiative endorsed by the Indonesia Stock Exchange and Stock Exchange of Thailand, GRI and CDP organized a Capital Markets seminar at the end of 2021 in both countries. A total of 914 participants received training on the role of capital market in enabling green and sustainable capital markets ecosystem.