Aligning the Financial Systems in the Asia Pacific Region to Sustainable Development
Adequate, appropriate finance is crucial for sustainable development in the Asia-Pacific region. The United Nations Economic and Social Commission for Asia and the Pacific UN (ESCAP) estimates that the region needs to invest around US$2.5 trillion a year between 2013 and 2030 to achieve key sustainable development goals:
- ¥ US$500-800 billion to close gaps in education, health, employment, social protection and basic access to energy services.
- ¥ US$800-$900 billion for developing infrastructure for energy, transport, telecommunications and water and sanitation.
- ¥ US$500-800 billion for climate change mitigation and renewable energy.
The region’s developing financial and capital markets provide a unique opportunity for innovative financial and capital market policies, regulations and standards that can align private capital flows to the financing needs of sustainable development. Notably, the region’s savings, US$8.4 trillion in 2012, represents more than half of the world’s total savings, the channeling of which will make a significant difference to regional and international progress towards sustainable development.
Sustainable finance in Asia, as well as elsewhere, has to date mainly concerned the actions of individual financial institutions, sometimes encouraged and supported by voluntary associations and principles. But sustainable finance is more than a set of individual actions. Work has now entered the next phase of designing the key parameters for the financial system as a whole.