CENTRAL banks in the region are pushing for sustainable investing, particularly through the issuances of so-called green bonds in the market.
In a statement, the Executives’ Meeting of East Asia-Pacific Central Banks (EMEAP) announced that its members have reached an agreement to promote investment in green bonds through the Asian Bond Fund (ABF).
The Bangko Sentral ng Pilipinas (BSP) is a member of the EMEAP along with the Reserve Bank of Australia, People’s Bank of China, Hong Kong Monetary Authority, Bank Indonesia, Bank of Japan, Bank of Korea, Bank Negara Malaysia, Reserve Bank of New Zealand, Monetary Authority of Singapore, and Bank of Thailand.
The group said this move is aimed at helping to catalyze further the deepening of local currency-denominated green bond markets in the region.
Green bonds are investment vehicles that specifically target support for sustainability or environmental causes.
From this viewpoint, the EMEAP ABF Oversight Committee has requested IHS Markit, an index provider of the iBoxx ABF Index, to review the rules of the Index to promote the inclusion of green bonds.
EMEAP said the details will be based on the outcome of the review and will be disclosed once confirmed by IHS Markit.
Just last month, BSP Governor Benjamin Diokno said more than $1 billion and P85.4 billion worth of green, social, and sustainability bonds have already been issued by “first mover” banks since 2017
The governor also urged local financial institutions to get into sustainable finance as part of broader efforts to promote a resilient, inclusive, and low-carbon economy.
“The BSP and financial institutions play a crucial part in mobilizing funds to finance green and sustainable projects, and at the same time, in safeguarding financial stability from shocks coming from climate and other environment-related factors. We expect more banks to follow suit as enabling regulations had been laid down complemented by continued capacity-building activities for the industry,” the governor said.