The heads of the development banks in three major Asian economies have been urged to extend their net-zero climate pledges to overseas investments.
As global finance and banking leaders gathered for the Finance in Common Summit this week Greenpeace Japan and Greenpeace East Asia published an open letter calling for China, Japan, and South Korea’s state-backed public development banks (PDBs) to apply national net-zero carbon pledges to overseas investments.
Greenpeace Japan Executive Director Sam Annesley and Greenpeace East Asia Executive Director Cheung Sze Pang urge East Asia’s PDBs to carry out the implications of net-zero pledges in overseas activities as well as domestically, to make a public policy to prohibit the support for coal-fired power plants, and to commit to financing the renewable energy transition in recipient countries, where public investment is skewed heavily toward fossil fuels.
In the co-signed letter, Annesley and Pang wrote: “Anyone who follows climate efforts in Asia quickly learns about public finance, its political relevance, and the support that PDBs of China, Japan, and South Korea provide to new coal- and gas-fired power projects outside their own borders. On the environmental impact of public finance, the science is clear, voices in the recipient countries are loud, and international investors’ advice is increasingly insistent: these short-term investments in coal have to stop now or you will violate long-term commitments to climate objectives made by your governments.“
The Finance in Common Summit, in Paris, which will end tomorrow, is the first meeting of the world’s over 400 PDBs. This year, the agenda includes efforts to reconcile short-term and long-term investment impact, direct collaborative efforts to achieve the UN Sustainable Development Goals, and to set the stage for 2021’s COP26, COP15, and Generation Equality Forum.
“PDBs are state-owned financial institutions that carry out government public policy objectives in economic development both nationally and internationally,” explained Greenpeace. “Profit is not an explicit goal of PDBs, in contrast to state-owned commercial banks or insurance companies. As state entities, public development banks have the ability to offer unique support, such as guarantees and concessional loans, to enact policy agendas.”