The Asian Transition Finance (ATF) Study Group, a consortium of multiple private financial institutions, drew up guidelines for financing low-carbon technologies and energy transition projects in Asia to help tackle climate change, as reported by Reuters on September 26. The study group published two reports: ATF Guidelines, and ATF Activity Report. The ATF Guidelines report was intended to provide technical guidance and transition support for transition finance assessment to financial institutions, while the ATF Activity Report formulated a list of support items that require the engagement of broader stakeholders. Led by Japan’s Mitsubishi UFJ Financial Group (MUFG) [8306:JP], the study group mainly comprises banks with operations in Asia, such as Citigroup [C:US], HSBC Holdings [HSBC:US], and Barclays [BARC:LN].

The ATF Study Group is committed to putting forward financing recommendations applicable to Asian countries and supplementing existing global standards and frameworks. For instance, the study group suggested that lenders refer to a list of transition technologies selected by the Economic Research Institute for ASEAN and East Asia (ERIA) when deciding whether to provide financing. The list covers converting coal-fired power generation to gas-fired and introducing hydrogen and ammonia into thermal power plants to reduce carbon emissions. The study group also stressed the importance of transition finance in helping Asian countries move toward net-zero emissions and the challenges they will face. Previously, in June 2022, The Glasgow Financial Alliance for Net Zero (GFANZ), another coalition of global leading financial institutions, launched an Asia-Pacific (APAC) network and office in Singapore to boost investment in decarbonization and renewable energy in Asia.

Sources:

https://www.reuters.com/business/sustainable-business/bank-study-group-sets-out-guidelines-financing-asias-energy-transition-2022-09-26/

https://mb.com.ph/2022/09/26/bdo-top-asian-banks-publish-financial-transition-guidelines/pkjdfssgbv

https://www.businesstimes.com.sg/global-enterprise/more-roadmaps-stakeholder-support-needed-for-asias-transition-finance-study

https://www.straitstimes.com/asia/se-asia/global-finance-coalition-sets-up-singapore-office-to-spur-regional-climate-action