Taking Deforestation out of Banks Portfolios in Emerging Markets
As of: November 2019
Objective and activities
Major causes of deforestation in Southeast Asia include unsustainable production of agricultural and forest commodities and infrastructure development. Aside from producers, buyers, consumers and government, the financial sector is one of the most powerful actors to stimulate sustainable commodity production as well as infrastructure development through its financial leverage and capital allocation decisions.To reduce negative impacts, this project will support the implementation of Environmental and Social (E&S) safeguards incl. deforestation free criteria in target countries’ financial institutions and financial market actors. It will provide sector specific guidance, review existing and improve or develop new financial products.In addition, the project will support the development and piloting of green financial products incl. green credit lines at landscape level with a focus on smallholders. Pilots will be carried out in at least one of the implementing countries.
State of implementation/results
- The project has developed the SUSBA tool, an online platform that benchmarks the ESG-policies of the largest banks in five ASEAN countries and helps to engage banks on their ESG integration progress (online at susba.org). The baseline assessment for the project was conducted in September 2018.-- The project facilitated two major industry wide workshops.The Directors Dialogue on Sustainable Finance on 7. December, 2018 in Indonesia and aResponsible Finance Workshop together with the Asian Banking Association (ABA) and the Bankers Association of the Philippines (BAP) on 16 October 2018 in the Philippines.
- For the development of green financial products focused on smallholders in the soft commodity sector landscapes are currently being selected. Assessment criteria for the landscapes include their attributes concerning land planning, commodities, smallholder characteristics and smallholder finance.