With the support of HSBC, the Climate Bonds Initiative has released the fifth report under its ASEAN Sustainable Finance State of the Market series. The report analyses developments and trends in the ASEAN sustainable finance market and highlights key policies and initiatives introduced to promote the growth of sustainable finance in Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam and across the region during 2022.
Following a very strong 2021, the ASEAN sustainable finance market contracted in 2022 for the first time ever. This contraction reflects adverse market conditions that negatively impacted global capital markets activity. While the sustainable finance volume – encompassing green, social, sustainability, sustainability-linked and transition debt – decreased by 32% year-on-year, it stayed robust at USD36 billion, which is almost twice the level of 2020.
Despite the contraction of the ASEAN sustainable finance market in 2022, many positives remain. Sovereign issuances stayed relatively strong, with Singapore and the Philippines becoming two new sovereign issuers of green and sustainability bonds respectively. This is a positive sign given the importance of sovereign transactions, both in stimulating market activity and development as well as in allocating large amounts of capital to sustainable projects and activities. In addition, 2022 was an active year for policy and market development initiatives in the region, with the release of the ASEAN Sustainability-Linked Bond Standards, as well as stakeholder consultation on the first version of the ASEAN Taxonomy conducted throughout the year, alongside a range of national-level sustainable finance policies, initiatives and measures by respective ASEAN Member States, including but not limited to the spheres of taxonomies, disclosures and transition finance.