JAKARTA, Feb. 18 (Xinhua) -- The Group of 20 (G20) meeting's host country Indonesia has urged finance leaders from the world's 20 top economies to push the issue of green bonds as part of a sustainable finance instrument to fight climate change.
Bank Indonesia's Governor Perry Warjiyo made the remarks on the second day of the G20 Finance Ministers and Central Bank Governors meeting here on Friday.
There has been a massive increase in the issuance of sustainable finance bonds globally since the first issuance in 2007, and the global issuance of green bonds reached 859 billion U.S. dollars in 2021, "the highest ever," Warjiyo said.
"However, the amount is still not enough to reach the target of investment that the world needs to adopt green energy," Warjiyo said.
According to the definition from the International Capital Market Association (ICMA), green bonds refer to the type of debt instrument used to support green projects, and may be used to raise funds for specific environmental and climate projects in such areas as alternative energy and low carbon materials.
Indonesia has started to improve its green and sustainable finance instruments, said Commissioner of Indonesia's Financial Services Authority Agus Edy Siregar at the event.
However, public and private entities still found it difficult to issue green instruments due to the lack of incentives to issue green bonds or profits in financing the green sector, Siregar said.
Managing Director and Chief Representative of ICMA for Asia Pacific Mushtaq Kapasi said it is still challenging for corporations or companies to adapt to sustainable financing instruments.
"The first challenge is the lack of training and awareness of this instrument. The second is the problem with ambition. Many investors around the world are now expecting ambitious sustainability targets and strategies, and that could be a challenge for many companies that are still on less climate-friendly businesses in Asia," Kapasi said. ■