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Environmental, Social and Governance (ESG) initiatives create opportunities for
climate change to be explored without harming human health and the environment. The

Green Recovery Program will help ASEAN countries close a significant gap in green
infrastructure financing, with the region's annual investment needs estimated at US$ 210
billion before COVID-19. Due to the pandemic, the gap will widen as the regional
economy contracted by 4.4% of GDP in 2020.
Another initiative to realize a green recovery is the ASEAN Catalytic Green
Finance Fund (ACGF) which mobilizes investments in green infrastructure to promote
clean energy, sustainable urban transport, water supply, sanitation, waste management
and climate-resilient agriculture. The Green Recovery Program supports 20 green

infrastructure projects in ASEAN member countries with a value of more than US$ 4
billion. According to estimates, these projects are expected to reduce carbon dioxide
emissions by about 119 million tons and create 340,000 green jobs 152 over 30 years
(2020-2050) in key areas such as sustainable transportation, renewable energy and
energy efficient systems, low carbon agriculture and natural resources.
Fourthly, digital finance solutions connect green finance users to reduce costs.

Green financial technology (fintech) solutions can also help mobilize domestic savings
for green investment by exploiting the ability to acquire and process information at
higher speeds with the lower costs and the level of trust increases.
ASEAN's digital financial services including payments, remittances, loans,
investments and insurance are expected to generate revenue worth US$ 38 billion in
2025, of which Singapore contributes US$ 9 billion and has an increase of 14% per year.
The revenue is up to US$ 60 billion across the region and contributes about 17% of the

total revenue of the financial services if certain conditions are met. Of the five services
in digital finance, digital payments and remittances are making the most progress, with
payments expected to surpass US$ 1 trillion in transaction value by 2025. The other
services (lending, investing, and insurance) are emerging and each service will grow by
more than 20% per year through 2025.
However, the ASEAN region is facing four factors hindering the development of

digital financial services, which are: i) consumers and businesses are slow to abandon
cash and going digital; ii) the lack of reliable digital identification systems in most
Southeast Asian markets; iii) management agencies lack a prudent approach; iv)
regional financial infrastructure is largely underdeveloped, with the exception of
Singapore.
Fifthly, developing the ASEAN Sustainable Finance Taxonomy. The
development of the ASEAN sustainable finance taxonomy was initiated by ASEAN
finance ministers and central bank governors in March 2021. This is a collective effort

of capital market developers, insurance management agencies and finance ministries
that have come together to create a new sustainability language for ASEAN.

152 Jasminder Kaur (2022), Discovering untapped sustainable finance opportunities towards green recovery in
ASEAN - ASEAN-Australia Strategic Youth Partnership (aasyp.org)

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