Sustainable Finance Sought to Tackle Inequality, Climate Change
Surakarta, 18 May 2022: Sustainable finance refers to any form of financing that incorporates environmental, social, and governance aspects into business and investment decisions. Sustainable finance aims towards greater benefits for clients and for society as a whole. It will play a key role in the world’s transition to net-zero emissions of greenhouse gasses by 2050 and is one of the six priority agendas in the financial track of Indonesia’s Group of Twenty (G20) 2022 presidency.
Such were some of the views presented by Dr Lili Yan Ing, ERIA’s lead advisor on Southeast Asia, during the Road to G20 Investment Forum. She said the current state of world development has two long-standing issues: inequality and climate change. She emphasised that global economic recovery should not come at the expense of poverty alleviation and the green economy. Both can be pursued at the same time, she added, by wider use of sustainable finance as nations and businesses develop.
As a recommendation to G20, Dr Lili suggested the enhancement of the role of multilateral development banks and the further development of carbon markets. With the current contraction of the world’s economy, Dr Lili said that fiscal policy will play an important role in meeting Indonesia’s sustainable development goals. Quoting US economist Joseph Stiglitz, Dr Lili said that development is not just about transforming economies but also transforming lives.