During the Green Finance Policy launching last week at the Hilton Hotel in Port Moresby, Bank of PNG Acting Governor Elizabeth Genia said, “green finance holds tremendous significance in our quest for a sustainable future.”
“In recent years, there has been a growing recognition of the urgent need to address environmental challenges and transition towards a more sustainable and resilient economy. Green finance plays a pivotal role in this transformative journey by channeling financial resources towards environmentally friendly and socially responsible projects,” Genia said.
The Acting Governor said green finance refers to financial investments and initiatives that promote sustainable economic growth while reducing negative environmental impacts. It encompasses a range of activities, such as investments in renewable energy projects, sustainable infrastructure development, energy-efficient technologies, and the adoption of environmentally friendly practices by businesses.
She added that one of the key drivers behind the rise of green finance is the recognition of the economic risks associated with environmental degradation. Climate change, deforestation, pollution, and other environmental issues pose significant threats to businesses and economies that will lead into issues of financial stability in the banking sector. Rising sea levels, extreme weather events, and resource scarcity can disrupt supply chains, increase production costs, and lead to financial losses. By embracing green finance, we can address these risks proactively, investing in projects that mitigate environmental challenges and foster long-term sustainability.
“We expect Green finance to offers several compelling benefits. Firstly, it promotes innovation and technological advancements. By directing funds towards sustainable projects, we stimulate research and development in renewable energy, energy efficiency, and clean technologies. This leads to the creation of new industries and job opportunities, driving economic growth in the process. Furthermore, green finance enhances energy security by reducing dependence on fossil fuels and promoting the use of renewable energy sources. It also improves public health by curbing pollution and promoting cleaner air and water.”
“Financial institutions have a responsibility to integrate environmental and social factors into their investment decision-making processes. They can develop innovative financial products, such as green bonds and sustainability-linked loans, to facilitate green investments. Bank of PNG with its partners will set up a Green finance Center at CEFI office to provide the support needed for the financial institutions to embark on his important journey,” Genia said.
