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The New ASEAN Green Bonds Standards

The New ASEAN Green Bonds Standards

Climate change poses a significant threat to the economic development of countries around the world. The World Bank estimates that up to a 100 million poor people could be pushed back into poverty by 2030 as a result of climate change – in part due to a combination of higher agricultural prices and threats to food security and health – especially in the poorer parts of the world. The Paris Agreement and the 2030 Sustainable Development Goals (SDGs) have provided commitments to tackle the most urgent of these environmental challenges.

The issuance of green bonds run in line with these commitments as their proceeds support environmentally friendly projects that can reduce CO2 emissions, promote energy efficiency and renewable energy, and improve water and sanitation management among others. Globally, this has begun to gain momentum. As of the third quarter of 2017, global green bond issuance stood at US$32.7 billion which was an additional US$500 million compared to the previous quarter. By the end of 2017, it was expected that total global green bond issuance (year-on-year) would be between US$120 to 130 billion, superseding the 2016 figures.

This makes the recent introduction of the ASEAN Green Bond Standards (ASEAN GBS) timely. Issued by the ASEAN Capital Markets Forum (ACMF), the ASEAN GBS will help the countries involved implement their commitments under the Paris Agreement and the SDGs, and also push for a standardized set of rules for green bonds across ASEAN member countries. At this point of time, ASEAN countries have either their own green bond standards to follow or no green bond standards at all.