A common language towards resilience, adaptability
The ASEAN Taxonomy for Sustainable Finance reinforces the region’s commitment to sustainability goals for 2045.
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The ASEAN Taxonomy for Sustainable Finance reinforces the region’s commitment to sustainability goals for 2045.
Inflation for January 2026 accelerated anew, with price increases clocking in at 2.0 percent for the month, versus 1.8 percent in December. One of the interesting trends in the consumer price index (CPI) was that the vegetables component has been gaining momentum, particularly during the fourth quarter. While there are seasonal swings in inflation, over the past two years, it seems that the intensity and frequency of typhoons passing through the Philippines may be the culprit. Our experience with typhoons affecting the food component of the CPI is not limited to vegetables, as we have seen them wreak havoc on sugar in 2022. If we are unlucky with the weather, inflation can spike, with bad weather blowing away some of our rice stocks and yields.
Food security is one of those strategic issues that are closely linked to climate change. The hotter the Earth becomes, the more we can expect the risks of flooding, drought, storm damage, and even heat waves to become a reality for everyone. Governments and the private sector are acting in various ways, but it all starts with science and commitments to targets to mitigate the impacts of climate change.
The target set by many nations under the Paris Agreement of 2015 is to limit global temperature rise to 1.5 degrees above pre-industrial levels. Over the past couple of years, the world has been exceeding this target. To enable governments to plan how to meet these targets, the Intergovernmental Panel on Climate Change (IPCC) has scenarios at 2.0 and 3.0 degrees, which show which areas around the globe are affected and how they are affected under these “stress test” scenarios. In other words, these scenarios illustrate what would happen if we fail to achieve our targets to mitigate climate change.
Beyond climate mitigation, nations are also focusing on climate adaptation. It can be more productive to develop strategies that promote resilience and adaptation to the effects of climate change.
At the end of the day, however, the execution of these adaptation strategies requires investment capital. In terms of climate mitigation, we know that a significant amount of capital has been allocated through the development of renewable energy and the avoidance of carbon emissions through technologies such as electric vehicles (EVs).
Unfortunately, the same cannot be said of climate adaptation. It is estimated that ASEAN needs $129 billion in annual adaptation financing up to 2030, but in the period from 2018 to 2019, only $3.4 billion was received, according to data from the Asian Development Bank (ADB). On a side note, and on the local front, potential adaptation efforts such as flood control are now the subject of a large corruption controversy.
To bring climate adaptation and resilience, as well as other climate action-related needs, into sharper focus for governments and investors, ASEAN is strengthening the foundational framework for capital markets to participate in this sustainability endeavor. As chair of the Association of Southeast Asian Nations (ASEAN), the Philippines will be hosting a conference on the region’s taxonomy on sustainable finance this week in Panglao, Bohol.
The ASEAN Taxonomy for Sustainable Finance reinforces the region’s commitment to sustainability goals for 2045. The taxonomy aligns the region’s framework with both national and global frameworks and would serve as a common language for sustainable finance and investing. A common language is necessary for sustainability-linked capital to flow within the region and between the region and the world.
This is, of course, only one of the initial steps toward meeting climate action targets. The Philippines itself has been collaborating closely with its neighbors, but it goes without saying that much more needs to be done. Despite the overhang of the corruption scandal, we cannot simply dismiss matters by saying that life is weather-weather lang. As one of the most disaster-prone countries in the region, it is in the Philippines’ best interest to focus on adapting to the worst weather that global warming can send our way.
