Coal phase-out top of the agenda at RI Asia

The APAC responsible finance industry came together in Singapore to discuss the region’s key ESG priorities.

Delegates from central banks and regulators, investors, banks and service providers descended on Singapore in October for the region’s leading sustainable finance conference, RI Asia. Difficult discussions around the challenges facing the region were front and centre over the course of the two-day event, which was held in the Lion City for the second year running.

One of the topics that loomed large was the controversy around the early retirement of coal in the region. While several Asian countries remain highly dependent on this leading source of greenhouse gas emissions, financing the early retirement of coal assets is attracting considerable momentum.

At the same time, there is a growing acknowledgement that financial sector commitments to divest from coal in the West could be a significant obstacle to attracting foreign capital. But Mushtaq Kapasi, ICMA’s chief representative in APAC, told the conference, “it is something we have to do, and do the best way that we can”.

Meanwhile, academics and data providers debated the limitations of artificial intelligence when used in a sustainable finance context. Julia Bingler, an Oxford University and Council of Economic Policies academic, told delegates that AI should be thought of as a research assistant that is not exempt from the same biases as the user. Panellists from FactSET and ICE agreed that providers should ensure transparency around the datasets and assumptions used to train AI models.

Carbon controversies

Another highlight of the conference was the panel on voluntary carbon markets. Panellists defended the controversial sector, with Rajesh Sundaresan, co-founder of offsets operator Carbon Impact Capital, even calling for companies to prioritise offsetting their emissions rather than embark on costly carbon reduction initiatives. Another speaker, Climate Policy Initiative’s Neha Khanna, was critical of that argument, but defended offsetting more generally, saying: “I would rather have an inefficient voluntary carbon market than no carbon market at all.”

And while the ESG backlash in the US is happening on the other side of the globe to Singapore, the topic loomed in the background of discussions. Satoshi Ikeda, chief sustainable finance officer at Japan’s Financial Services Agency, called for sustainable finance practitioners to focus on investment issues, noting that Asia was not immune to a similar anti-ESG reaction. “There are certain elements in values-based investing that will cause polarisation in society, but this can be avoided if ESG focuses on enterprise value,” he said.