Asia-Pacific leads the transition finance momentum – what’s next?

Transition is an important theme in the ESG space, and defining transition is salient in the Southeast Asia (SEA) region where the progressive shift towards a Net Zero economy is taking place alongside economic development, population growth, and rising energy demands. Given Singapore’s role as SEA’s key financial hub, it is one of the ideal marketplaces to bring together issuers and investors to explore this challenging, futuristic yet pivotal topic.

In addition, the Singapore Government has supported and placed strong emphasis on transition finance, with its de-facto central bank Monetary Authority of Singapore (MAS) launching the world’s first taxonomy in December last year.

On 16 May 2024, Crédit Agricole CIB gathered sustainable finance experts from across Asia-Pacific markets to explore how the region can bring forward the transition finance agenda together. The agenda covers private one-on-one issuer-investor meetings, closed-door investor roundtable, a workshop led by Moody’s, and ended with a panel discussion to explore transition topics including current opportunities and challenges, as well as capital investment. We were delighted to invite two distinguished keynote speakers from the Singapore Exchange (SGX) and International Finance Corporation (IFC) to share key insights before the panel discussion.

Sustainable Investment Banking and Credit Sales teams in Singapore jointly hosted the successful sustainable finance event. This is the second time Crédit Agricole CIB hosted sustainable finance forum for issuers and investors in Singapore, followed by last year’s Green Rendezvous ESG x Credit event.

What is effective transition finance, and why is it important?

Effective transition is about greening the economy in a way that is fair and inclusive, in addition to expanding the pure green economy.

To reach Net Zero by 2050, building green finance for solar panels and wind farms is one of the pathways, but we shall also progressively de-carbonise all sectors of the economy by considering other intermediate stages. Financial flows into climate action are still sorely lacking and establishing transition finance is crucial to support progressive and ambitious transition efforts in the economy.

As the SEA region operates at a different pace compared to the European Union, it is important to consider the specific country’s energy needs regarding energy security, affordability, availability and accessibility when navigating the landscape of transition finance. Today, corporates face different challenges, mainly external resource constraints and pricing dynamics. That being said, investors are highly supportive of investing in financial instruments dedicated to transition and their key assessment criteria would be the environmental impact of these investments.

By fostering dialogue between issuers and investors in the transition event, Crédit Agricole CIB plays a pivotal role to galvanise collective action across the financial ecosystem to propel the transition agenda. 
 

• Crédit Agricole Group’s climate commitment (December 2023)
• Crédit Agricole CIB’s transition experience – thought leadership paper (October 2023) Will open in a new tab