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How can we mobilise finance to build back a resilient, sustainable post-Covid economy?

Singapore — In the wake of a pandemic-induced regional economic downturn, financial institutions are vital to building a more resilient, sustainable future for Asia, said business and finance leaders at this year’s Unlocking capital for sustainability

The annual conference was held virtually for the first time, enabling participants in multiple countries to convene online. More than 100 senior bankers and investors, finance and business leaders gathered to discuss how the finance industry can contribute to long-term economic recovery by aligning their investment decisions with the Sustainable Development Goals (SDGs). 

This third edition of the forum is organised by Eco-Business, a Singapore-headquartered media organisation dedicated to sustainable development, in partnership with United Nations Environment Programme (UN Environment Programme). 

“This year’s forum comes at a critical time as countries all over the world are grappling with the ongoing coronavirus pandemic while trying to jumpstart their stalled economies. Amid this recovery, we must look at how to tie these fiscal stimulus measures and recovery policies to positive sustainable development outcomes,” said Eco-Business’s Managing Director, Jessica Cheam. 

She added: “Covid-19 has revealed how important environmental, social and governance (ESG) and sustainability issues are to the health and well-being of people and the planet. So the key question we will discuss throughout this conference is: How do we guide finance and business to build back better?” 

While the coronavirus pandemic has wreaked economic havoc and pushed some industries to the brink, it has also created opportunities and incentives for sustainable financing, said leaders from multilateral agencies and the finance sector at the event. 

They highlighted the numerous investment opportunities in sustainable development in the region, particularly in resource management, green infrastructure, and renewable energy, among others. 

“Players in the financial industry have a crucial role to play in supporting economic activity that enhances rather than damages the environment, sustains rather than erodes livelihoods, and contributes to, rather than undermines, economic stability,” said Yeoh El Lynn, Head of Ethics, Prudential Assurance Company Singapore, which has committed S$200 million of total assets under management into ESG-related products by 2021. 

“To fulfil this role, sustainable finance and responsible investment has become not only a prerequisite, but a staple for the resilience and stability of the financial industry,” said Yeoh. 

The UN predicts that the pandemic will have a severe impact on the achievement of the SDGs by 2030, particularly in less developed countries.  

According to UN projections, the Covid-19 pandemic is expected to shrink the world economy by 3.2 per cent in 2020, resulting in the loss of $8.5 trillion in global output.  

The collaboration of international financial institutions, governments, international organisations, and the private sector is crucial to ensure that these systems are able to withstand future economic shocks caused by environmental and public health risks. By aligning with the SDGs, companies and organisations can mitigate these risks to aid long-term profitability. 

At the event, regional non-profit organisation Fair Finance Asia also launched a new study, The Asian Web: Tracking Regional Financial Flows, which is aimed at encouraging key stakeholders to track and assess whether financial institutions operating in the region are banking on our shared commitments towards a sustainable future.. 

Bernadette Victorio, Regional Programme Lead, Fair Finance Asia, who spoke at the event, said: “Asian financial institutions have the potential to be key levers of change by encouraging responsible business practices through their financing and investment activities. However, the change needs to begin within their own institutions.”  

Other highlights from the event included a keynote address by United Nations Assistant Secretary-General for Economic Development and Chief Economist, Elliott Harris, plenary discussions about the regulation of sustainable finance, the role of Asian banks in the energy transition, corporate leadership in ESG integration, and investing in the circular economy. 

In advance of the publication of his book, Sustainable Investing: A Path to a New Horizon, founding Executive Director of the UN Global Compact Georg Kell gave a special address at the conference.  

The book, which features contributions from a number of global thought-leaders, academics, and practitioners, details the rise of sustainable investing and corporate sustainability and outlines the transformation needed to accelerate change. 

Kell observed: “The idea and practice of corporate sustainability is no longer a niche movement. ESG represents the next growth frontier in asset management, and the integration of sustainability factors in investment decisions is impacting global markets on a large scale. However, the continued shift to sustainable investing and its implementation will require leadership, a culture of innovation, and effective engagement with all stakeholders.”  

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