Bridging the financial gap to realize the ambitions of the 2030 Agenda for Sustainable Development and the Paris Agreement requires joint actions by governments, regulators and the private sector, as highlighted by a recent ESCAP report, Sustainable Finance: Bridging the Gap in Asia and the Pacific. With regards to the role of private sector and financial institutions, voluntary sustainability frameworks and initiatives have played an important role. 

Over the past decade, financial institutions have increasingly aligned themselves with these global frameworks. The Principles for Responsible Banking (PRB), launched in 2019 with around 80 founding banks, now include over 345 signatories representing more than half of the global banking assets. Similarly, the Principles for Sustainable Insurance (PSI) continue to guide insurers in embedding sustainability into their core operations. These frameworks, led by UN Environment Programme Finance Initiative (UNEP FI) and developed by member banks and insurers, have helped institutions demonstrate ambition, share best practices, and build credibility in their sustainability journeys.

Although support for sustainable finance initiatives has varied globally in recent years, they continue to play a vital role in enhancing credibility, transparency, and accountability of sustainable finance. This is especially true for Asia and the Pacific, where the sustainable finance market is projected to grow from USD 1.25 trillion in 2024 to over USD 7.7 trillion by 2034. The region is also the fastest growing within UNEP FI frameworks such as the PRB and the PSI, reflecting a strong appetite for structured, principle-based approaches to sustainability. As of 2025, UNEP FI membership in Asia-Pacific includes more than 100 financial institutions—over 70 banks and 25 insurers—that are actively integrating sustainability into their operations, while financial regulators and supervisors in the region are also integrating climate-related risks into their regulatory frameworks. 

The support from financial institutions and their regulators to enhance capacity to advance sustainability in finance also varies widely across countries. For instance, while China invested USD 627 billion in clean energy in 2025, accounting for nearly a third of global investment, many smaller economies in the region continue to experience significant barriers to enhance sustainable finance at scale. These disparities underscore the importance of voluntary frameworks. They offer a common language and structured approach that banks and insurers across diverse markets can use to benchmark their progress and align with global standards. These alliances also provide platforms for peer learning, helping institutions navigate regional challenges such as financial inclusion, resilience to climate change, and policy barriers.

The relevance of these frameworks has been highlighted in a recent report by MSCI Sustainability Institute. The report shows that banks that have committed to the PRB often have lower cost of capital, stronger risk policies, faster growth of lending to small and medium enterprises, greater board-level accountability, more product innovation, and stronger ESG leadership. A recent working paper from the Harvard Business School also analysed data from 424 publicly traded financial institutions who have committed to eleven major financial alliances and found that these institutions are characterized by increased adoption of climate-aligned management practices, greater adoption of emissions targets, and reductions of own-emissions. 

Although some initiatives have reduced mandatory requirement for their members, some are adopting renewed mandates to deepen their support for organizations to deliver on their climate strategies. This support includes helping financial institutions to work directly with their customers to address policy barriers and unlock green investment opportunities. In addition, they continue to support their members to comply with new climate reporting mandates in their jurisdictions and to reinforce their accountability to shareholders, investors, supervisors, regulators and the public. For example, the Forum for Insurance Transition to Net Zero recently launched a first-of-its-kind transition plan guide tailored for insurance and reinsurance underwriting portfolios, supporting the whole insurance industry

In sum, as Asia and the Pacific region navigates the complex transition to a low-carbon, inclusive, and resilient economy, voluntary sustainability frameworks and commitments remain indispensable. They provide the tools, networks, and credibility needed to mobilize capital at scale and ensure that financial institutions are not just reacting to change—but actively shaping it.