Asia needs an investment worth $7.7 trillion (£5.6tn) in renewables and energy efficiency projects to meet the 2°C climate change target.
That’s according to a report published by the Asia Investor Group on Climate Change (AIGCC), which reviewed 36 banks, 30 investors and 24 insurers of the continent’s finance sector.
The AIGCC is a new initiative created to raise awareness among the continent’s asset owners and financial institutions about the risks and opportunities related to climate change and low carbon investment.
Some of the members of the group include Armstrong Asset Management, the International Financial Corporation and Brawn Capital.
The report found a significant shift towards embedding climate risk and responsible investment into core business activities.
Around 31% of the institutions factored climate change risks into their financing operations, with 61% of banks referring to green products and 56% providing some quantification of their exposure.
More than a quarter of banks referred to climate change factors as a reason to limit financing and 81% disclosed their policy on responsible lending.
The report highlighted Chinesse banks are leading in taking steps to restrict finance to industries with high energy consumption and excess pollution.
However, it added much remains to be done as financial regulators need to take steps to catalyse the shift to low carbon investment to reduce systemic risks and improve competitiveness.
Andrew Affleck, Managing Partner of Armstrong Asset Management and AIGCC member said: “Many parts of Asia are at the frontline of the adverse impacts of climate change. The AIGCC is uniquely positioned by its focus and collective objective to highlight key challenges against and create benchmark solutions for scaling climate finance and investment throughout Asia.”