Remarks by Ms Kanni Wignaraja at the SDG Impact Conference “Transitioning to net-positive”

May 23, 2024

UNDP Regional Director for Asia and the Pacific, Kanni Wignaraja, delivered a keynote speech at the SDG Impact Conference “Transitioning to net-positive” in Beijing, China.

Dr. Ma Jun, Diana, my UNDP colleagues, distinguished guests,

Good morning.

In the Asia Pacific region, we are a staggering 32 years behind schedule on achieving the SDGs, with Goal 13, climate action, even regressing.[i] For some countries in our region, this is not abstract, for it means disappearing into the ocean!

So, we cannot afford any SDG complacency and least of all climate complacency.

Between 2000 and 2023, over 1600 floods devastated this region, killing more than 88,000 people, and impacting 1.6 billion. They represent 91 percent of all people affected by severe flooding globally. Flash floods in countries like Afganistan are now common place.

Counting the economic losses it is a staggering 452 billion dollars.[ii]

We need to move faster!

By 2050, this region risks losing one third of its GDP to climate change.[iii] And with over 4.3 billion people living in this region and dependent on 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.[iv] This conversation is focused on tried and potential solutions that can accelerate financing for this region's low carbon transitions.

With public finances depleted by the COVID-19 pandemic and other simultaneous shocks, we all know it will take the unleashing and directing of more private capital for this cause. Public finance, both domestic and international, must still play that critical role to incentivize, de-risk and hence leverage private finance.

Dr Ma spoke to setting up a green finance system and not a single product – so true!

What makes the case? Globally, nature-positive solutions can create an annual 10-trillion-dollar investment opportunity and close to 400 million new jobs by 2030.[v] Among these opportunities, the vast majority sit in Asia. China leads the change as we heard. The scale here is extraordinary and it will drive the new directions.

"The growing evidence and the math seems clear: green investments support not only people and planet, but also, prosperity. However, turning these massive hard-to-abate sectors and huge business and political interests, will take more than doing the math. It will take financing of these transitions."

The growing evidence and the math seems clear: green investments support not only people and planet, but also, prosperity. However, turning these massive hard-to-abate sectors and huge business and political interests, will take more than doing the math. It will take financing of these transitions.

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.[vi]

I would also say we have to go well beyond measuring ESG to investing in SDG impact and transition financing.

Four areas of UNDP support currently underway with several countries in the region are as follows:

- Through initiatives like our “Unlocking Private Capital” program and our Sustainable Finance Hub, we support the design of SDG-aligned investment projects, and sustainable debt instruments. You have seen the take off of Green and Blue Bonds in this region, and hopefully the rates and terms get better and better, so countries benefit more from a green/blue premium.

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

- We have developed SDG Investor Maps highlighting SDG investment opportunity areas in over 40 countries. These are now used by investors in formulating their investment strategies.

- We work 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 also 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.

We 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 UNDP's flagship Biodiversity Finance Initiative and support to the Taskforce on Nature Related Financial Disclosure in over 40 countries, we're 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.

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

Later today we will launch our report on “Financing Climate Transition in China’s Agri-food System: Mitigation, Adaptation, and Justice”, in collaboration with the Macro and Green Finance Lab of Peking University’s National School of Development and the Climate Bond Initiative.

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

For our private sector partners, 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.

Let me emphasize two challenges or uncomfortable facts here as I end.

First, much of the finance that goes to climate financing today comes as loans at market rates, costing developing countries heavily.

Second, these transitions need strong political and social buy-in, to deliver prosperity to all. We emphasize “just” transitions to ensure that existing inequalities are not exacerbated, but rather addressed, in designing new systemic solutions that combat negative effects on the poorest and vulnerable in terms of their livelihoods, food security and human development opportunities. If not, we leave more people behind.

So, it goes without saying that these transitions cannot take place without the adequate governance mechanisms and institutional and people capabilities to make it happen.

I close by thanking our co-hosts of today’s conference, ASIFMA, the Macro and Green Finance Lab of Peking University, and the Climate Bond Initiative. This shows the shared commitment to this cause.

And thank you to all the panelists and participants for sharing your ideas with us, and I look forward to the results of our discussions.

Thank you.

[i] Asia and the Pacific SDG progress report 2024 : showcasing transformative actions | ESCAP (unescap.org)
[ii] People and Planet: Addressing the Interlinked Challenges of Climate Change, Poverty and Hunger in Asia and the Pacific | United Nations Development Programme (undp.org)
[iii] https://www.weforum.org/agenda/2024/02/why-public-private-philanthropic-partnerships-are-central-in-asia-pacifics-climate-action/
[iv] Explainer: How Asia Can Unlock $800 Billion of Climate Financing (imf.org)
[v] WEF_The_Future_Of_Nature_And_Business_2020.pdf (weforum.org)
[vi] Asset and wealth management revolution 2022: Exponential expectations for ESG (pwc.com)