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Public Policies in Focus as APEC Pushes for Sustainable Finance Solutions
Issued by the APEC Finance Ministers’ Process
The growing urgency to address climate change and environmental challenges has propelled sustainable finance into the spotlight as governments, businesses and investors increasingly prioritize sustainability considerations. This shift is transforming the financial landscape and driving capital toward projects that promote sustainability from renewable energy infrastructure to social impact initiatives.
Against this backdrop, APEC Finance Ministers from across the APEC region convened in Lima on Sunday to discuss strategies for promoting low-carbon, climate-resilient economies. Representatives from international organizations, business leaders, and experts also offered their views on transition to a sustainable economy and the potential for investment it may bring.
Opening the High-Level Event on Sustainable Finance: Public Policies in Action for Sustainable Development, José Arista Arbildo, Peru’s Minister of Economy and Finance, emphasized the importance of recognizing the interconnection between economic growth, environmental sustainability and social well-being.
“We are facing unprecedented global environmental challenges such as climate change, biodiversity loss and natural resource scarcity,” Minister Arista said. “These challenges not only pose a threat to the environment, but also have significant implications for economic stability and the well-being of the populations of our economies.”
Sustainable finance, a broad term that refers to investments aimed at generating both financial returns and positive environmental or social outcomes, has seen unprecedented growth. With the global economy increasingly focused on mitigating climate risks and achieving long-term sustainable development, financial institutions are responding by integrating sustainability criteria into their portfolios.
“The strengthening of economic and financial systems is necessary to ensure their efficient adaptation to new paradigms that will make it possible to promote environmental, social and economic sustainability,” he added. “In this context, public policies are a transformative tool for integrating sustainability into the financial framework of our economies.”
To successfully embed sustainability into the financial system, economies must embrace a strategic vision that shapes public policies promoting environmentally responsible practices.
“Strategic planning for this integration is not only an ethical imperative, but also an economic necessity,” Minister Arista explained. “Providing a predictable framework for sustainable finance is one such policy.”
During the panel discussion, experts called for holistic strategies that harmonize economic and financial activities to foster competitiveness and productivity. They stressed the importance of setting clear, long-term sustainability goals including the importance of governance frameworks and spaces for coordination; and fostering collaboration among stakeholders.
The conversation also tackled the practical challenges member economies face in implementing sustainable financial practices. It further underscored the critical role of public-private partnerships in overcoming obstacles such as limited funding and regulatory barriers.
APEC Business Advisory Council Chair, Julia Torreblanca, echoed the sentiment, highlighting the importance of business and public sector collaboration in driving sustainable development.
“Sustainable finance is a joint endeavor where the private sector plays a critical role,” Torreblanca said. “However, it needs a policy environment that fosters innovation, facilitates sustainable investments and nurtures public-private collaboration.”
According to experts, the transition to a sustainable economy presents significant investment opportunities despite the challenges. From renewable energy projects to sustainable agriculture, sectors aimed at reducing carbon emissions and promoting social equity are poised for growth. Experts also explored the potential for innovative economic instruments to support sustainability initiatives.
One key takeaway from the event was the importance of fostering partnerships between governments, businesses and financial institutions. Such collaborations are seen as essential for creating innovative financial instruments and policies that will enhance the implementation of sustainable finance initiatives across the APEC region.
“Being appropriately prepared to address emerging challenges and seize opportunities along the path to sustainable finance is essential,” Minister Arista concluded. “Public policies are thus a powerful tool that can guide us. If designed and implemented correctly, they can transform our economies and societies.”
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APEC Finance Ministers Forge Strategies Focused on Sustainable, Digital and Resilient Finances
Issued by the APEC Finance Ministers’ Meeting
As the global economic landscape continues to face economic, financial and environmental challenges, APEC Finance Ministers from across the region are working together under this year’s theme to promote a more sustainable, digital and resilient future. In 2024, the Finance Ministers’ Process (FMP) seeks to address economic integration, digital transformation and the broader social dimensions of growth.
APEC Finance Ministers met in Lima, Peru on Monday where they were joined by representatives of international organizations and the private sector to discuss policy responses and future prospects for the region. Setting the tone for the meeting, Erick Lahura, Chief of Cabinet of Peru’s Ministry of Economy, opened the session and highlighted the imperative for APEC economies to collaborate closely in achieving the vision for a more resilient and inclusive Asia-Pacific.
“To ensure the long-term prosperity of the Asia-Pacific, we must focus on sustainable practices, digital transformation and building resilience across our economies,” said Lahura. “This year, our work within the FMP will guide us toward a region that is stronger, more connected and better prepared to face future challenges.”
A key topic was the importance of sustainable finance, with a special focus on the implementation of the four policy areas: domestic carbon pricing and non-pricing measures, sustainable energy transitions, sustainable infrastructure financing, and the sustainable finance initiative. Members emphasized the significance of resilient finance, particularly in enhancing policies related to hydrometeorological risk.
Along this line, Finance Ministers announced the launch of Sustainable Finance Initiative (SFI) as a flexible, voluntary and non-binding collaboration tool between the public and private sectors and international organizations to promote the development of voluntary information sharing tools and capacity building resources on sustainable finance issues. The SFI was designed to empower financial institutions, regulators and investors to develop expertise in sustainable finance, ultimately contributing to the promotion of green and inclusive economic growth while addressing pressing global challenges such as climate change and social inequality.
Besides, in a region where nearly 40 percent of the world’s disasters strike, with over 140 of those affecting more than 64 million people in 2022 and economic costs reaching USD 65 billion in 2023, APEC member economies committed to enhance their resilience by building deeper financial markets. Finance ministers are confident that resiliency can be bolstered through the development of innovative disaster risk financing and insurance mechanisms, and other risk transfer instruments available through capital markets.
Members also emphasized the significance of digital finance, highlighting the progress made this year in two key policy areas: open finance and digital financial inclusion. Ambassador Carlos Vasquez, the APEC 2024 SOM Chair, noted the transformative impact of Peru’s FinTech sector in driving financial inclusion and the small business empowerment. He pointed out that Peru now hosts over 237 FinTech companies, with digital payment transactions increasing by 113 percent over the past year. “Our collective efforts to harness technology for the benefit of all ensures that everyone benefits from the growth opportunities we are working towards”, Vasquez indicated.
Dr Rebecca Sta Maria, executive director of the APEC Secretariat, highlighted the need for a whole-of-APEC approach to ensure that the social dimensions of economic growth are addressed, particularly in improving the quality of life through decent jobs, sustainable private investment and inclusive financial systems.
“Our work makes a meaningful impact when we focus on improving the quality of life for our people,” Dr Sta Maria explained. “Whether it be through regional economic integration or digital transformation, we must ultimately emphasize social inclusion and equity.”
Other measures in the spotlight included strategies to combat rising protectionism and promote trade facilitation. The need for continued vigilance in monetary policies was highlighted, especially in light of recent interest rate adjustments and their potential impact on currency valuations and inflation.
Carlos Kuriyama, director of APEC Policy Support Unit, reported a steady GDP growth of 3.6 percent in the APEC region for the first half of 2024, a slight increase from the previous year.
“Economic recovery has been bolstered by improving consumption rates and easing inflation, although risks such as protectionism, supply chain uncertainties, and geopolitical tensions remain critical concerns,” Kuriyama concluded.
Finally, the Minister of Economy and Finance of Peru, José Arista, concluded the meeting highlighting that Peru proposed a very ambitious plan for this year, with the most number of decisions, innovations and documents adopted in all the history of the FMP, and appreciates the work of all APEC economies, APEC Secretariat, APEC Business Advisory Council and international organizations for making this possible.
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APEC Media at media@apec.org
APEC Finance Ministers Issue Joint Statement
Issued by the APEC Finance Ministers’ ProcessFinance Ministers from the 21 APEC member economies released a joint statement at the conclusion of their meeting in Lima on Monday under the theme, “Sustainable + Digital + Resilient = APEC.”
The statement reflects the outcomes of the 2024 APEC Finance Ministers’ Meeting chaired by José Arista Arbildo, Peru’s Minister of Economy and Finance. It describes joint actions to be taken forward by APEC member economies in the following priority areas:
- Global and Regional Economy
- Sustainable Finance
- Domestic Carbon Pricing and Non-pricing Measures
- Sustainable Energy Transitions
- Sustainable Infrastructure Financing
- Open Finance to Enhance Competition and Foster Innovation
- Digital Financial Inclusion
- Hydrometeorological Risk Financing
- Modernization of the Finance Ministers’ Process
View the 2024 APEC Joint Finance Ministerial Statement
and accompanying Chair’s Statement
Finance Ministers also launched the Sustainable Finance Initiative for the coordination and promotion of voluntary information sharing and capacity building on sustainable finance issues. They further welcomed the adoption of the guidance document for developing a new roadmap and endorsed a strategy to modernize the Finance Ministers’ Process.
Read the accompanying annexes to the joint statement:
Annex A. Sustainable Finance Initiative
Annex B. Guidance Document for Developing a New Finance Ministers’ Process Roadmap
Annex C. Second Strategy for Modernization of the Finance Ministers’ Process
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APEC Media at media@apec.org
