Lowering carbon emissions and achieving net-zero ambition require active participation by multiple stakeholders, including the private sector in implementing sustainable business practices.
Gradually, a growing number of companies have increased awareness of the importance of aligning their operations with environment, social and governance (ESG) standards – particularly as the government aim to achieve net-zero emissions by 2050.
The rising awareness by both the private sector and policy-makers is highly welcome, though the pivot toward sustainable development needs a supporting ecosystem, especially in technology and finance.
Role of the financial sector
To help achieve the zero-emission target by 2050, the financial sector has been making major strides in adjusting its financing framework, policy and strategy to enable swift transformation in the coming decades.
Research by Boston Consulting Group and Global Financial Markets Association showed that meeting global carbon emission goals will require as much as $150 trillion within the next three decades. In Asia, the financing gap is estimated at $66 trillion.
Dr.Celine Herweijer, Group Chief Sustainability Officer HSBC, underscored the importance of the Asian region in achieving a net-zero target worldwide. One of the concrete steps taken by HSBC is phasing out thermal coal financing in the European Union by 2030 and the rest of the world by 2040.
Acknowledging the need for immediate change, HSBC and other global banks have created the Net-Zero Banking Alliance to unify the framework of the banking industry and align investment and lending portfolios among their members to support the low-carbon transition.
Established in April 2021, the alliance currently has 115 banks from 41 countries, with $70 trillion worth of combined assets – roughly 38 per cent of global banking assets.
"There is a lot to be worked through which will require radical collaboration – between banks and their customers, their investors, and critically also with regulators and scientific bodies. But 'business-as-usual' has changed: the financial world now understands that it must be at the heart of the transition to net zero," opined Dr. Herweijer .
In Southeast Asia, HSBC has joined forces with Temasek as well as the Asian Development Bank (ADB) to extend as much as $1 billion worth of loans to sustainable infrastructures such as renewable energy and storage, water and waste treatment and sustainable transportation.
HSBC has also partnered with the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) in the Climate Solutions Partnership, a $100 million partnership initiated by HSBC Group to help tackle barriers to sustainable financing.
At the moment, sustainable projects face hurdles in insufficient policy and regulatory frameworks, gaps between demand and supply, and a lack of mature measurement tools and business cases.
Overcoming those barriers can only be achieved through collaboration among companies, the banking sector, policy-makers and non-government organizations.
At HSBC, we have an established framework and professionals to help customers to access sustainable finance and seek the best fit to facilitate each of their specific projects.
In Indonesia, HSBC is ready to partner with companies in their journey to become sustainable businesses that align with ESG principles.
For more information on sustainable financing by HSBC, please leave a message on our website (end)
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