The Asia Pacific region is 32 years behind schedule on achieving the SDGs, with Goal 13, climate action, even regressing.

This is not an abstract measure. For some countries in the region, it quite literally means disappearing into the ocean. 

Humanity cannot afford any SDG complacency and least of all climate complacency. With densely populated coasts, heavy dependence on agriculture, poverty that still afflicts millions, and temperatures rising twice as fast as the global average, this is the most vulnerable region to climate change.iii  

Between 2000 and 2023, over 1600 floods devastated the Asia Pacific region, killing more than 88,000 people, and impacting 1.6 billion. They represent 91 percent of all people affected by severe flooding globally. Counting the economic losses it is a staggering 452 billion dollars.

By 2050, this region risks losing one-third of its GDP to climate change.v And with over 4.3 billion people reliant on this region growing sustainable economies, this means climate investments are needed at greater speed and scale.   

As it currently stands, the Asia Pacific region faces a significant shortfall in climate financing: at least 800 billion dollars annually.

With public finances depleted by the COVID-19 pandemic and other simultaneous shocks, it is evident that it will take the unleashing and directing of more private capital to help fight climate change. Public finance, both domestic and international, must still play that critical role to incentivize, de-risk and hence leverage private finance.  

Globally, nature-positive solutions can create an annual 10-trillion-dollar investment opportunity and close to 400 million new jobs by 2030. The vast majority of these opportunities sit in Asia.  

By contrast, according to the Climate Policy Initiative, staying on our current trajectory would trigger projected global losses of 2.3 quadrillion dollars by 2100.

Meeting the 1.5 degrees Celsius target of the Paris Climate Agreement would save four-fifths of that amount. 

The math is clear: green investments support not only people and planet, but also, prosperity. However, turning heavily laden massive industries, hard-to-abate sectors and huge business and political interests around, will take more than doing the math. 

Encouragingly, some key countries and investors around the world are catching on. Globally, ESG assets are expected to surpass 33.9 trillion dollars by 2026, representing over one-fifth of total assets under management.

UNDP is deeply committed to supporting this transformation through four areas of support currently underway with several countries in the region.

First, through initiatives like the “Unlocking Private Capital” program and Sustainable Finance Hub, UNDP supports the design of SDG-aligned investment projects, and sustainable debt instruments. Green and Blue Bonds have been taking off in this region, and hopefully the rates and terms improve, so countries benefit more from a green/blue premium.

Second, UNDP has developed the SDG Impact Standards, helping businesses and investors worldwide to better incorporate sustainability, the SDGs, and impact management. These standards move beyond just managing ESG risks, to making a net-positive contribution.

Third, UNDP has developed SDG Investor Maps highlighting SDG investment opportunity areas in over 40 countries which are used by investors in formulating investment strategies.

Fourth, UNDP works with Securities & Exchange Commissions to develop SDG measures and guidance for their listed companies and provide a dedicated platform to track and report on their contributions to the SDGs.  

Many of these global initiatives have been piloted in China. This includes a successful initiative with the New Development Bank supporting the issuance a 5 billion RMB SDG bond on China’s inter-bank market in 2021.  

UNDP has also worked with the National Association of Financial Market Institutional Investors (NAFMII) in China and provided technical assistance to initiate their first trials of social and sustainability bonds.  

Through the flagship Biodiversity Finance Initiative and support to the Taskforce on Nature Related Financial Disclosure in over 40 countries, UNDP is working to redirect both public and private finance towards activities with nature-positive outcomes. The governments of Shandong and Shanghai have joined us, generating lessons and innovative approaches to advance biodiversity finance around the world. 

Globally, through the G20 Sustainable Finance Working Group, UNDP is actively working with countries to develop a set of principles on transition finance.

A report on “Financing Climate Transition in China’s Agri-food System: Mitigation, Adaptation, and Justice”, was recently launched in collaboration with the Macro and Green Finance Lab of Peking University’s National School of Development and the Climate Bond Initiative.  

It identifies the opportunities and challenges of transition in agriculture -- a hard-to-abate sector with the least evidence-based research available - towards net-zero paradigms. It also explores financial mechanisms and policy incentives to support the transition, along with growth opportunities, so together they can guide stakeholders to invest at scale.  

For the private sector, the business case is clear: hundreds of studies have proven that addressing sustainability boosts competitiveness and market share. And -- if done properly -- can also improve financial performance and risk resilience. 

These wide-reaching transitions require strong political and social buy-in to strengthen the governance mechanisms and institutional and human capacities needed to protect the poorest and most vulnerable in terms of their livelihoods, food security, and human development opportunities.

With the deadline for the SDGs only six years away, the Asia-Pacific region faces daunting development challenges to ensure a low-carbon future. But, with international organizations, businesses, and governments all working together, the region also has the potential to lead the way in realizing the necessary financing to deliver shared prosperity, and ensure a cleaner, more sustainable, and inclusive future for all.

Kanni Wignaraja is UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific.

The views don’t necessarily reflect those of China Daily.

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