The finance sector must scale up its efforts to accelerate the transition to a low-carbon economy and achieve net-zero emissions. There is growing recognition that financial initiatives should go beyond funding green projects and instead support a broader economy-wide shift toward net zero. Transition finance, which aims to facilitate this shift, has gained significant attention recently. In Asia, efforts to develop a taxonomy for green and transitional activities are underway to promote transition finance. To evaluate current practices and plans, the Asian Development Bank Institute (ADBI) conducted a survey in August 2024, focusing on 10 Asian financial authorities as part of the ADBI–ADB Asian Climate Finance Dialogue (Shirai and Dang 2024).
The survey highlighted the importance of transparency in climate-related corporate disclosures, such as greenhouse gas emissions reduction targets and timetables, science-based targets, and transition plans. The survey asked whether financial authorities encourage or plan to encourage entities to set emissions reduction targets. The responses showed that all respondents had encouraged entities to set such targets.
Regarding the types of targets, about 60% of respondents selected "net-zero emissions reduction targets and associated short- and medium-term objectives (aligned with a 1.5°C pathway)". Another 30% chose the option "emissions reduction targets without specifying temperature pathways." Only 10% selected the answer "short-, medium-, and long-term emissions reduction targets in line with a pathway well below 2°C".
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