Asia needs a stronger policy push to incentivise green financing to reach climate goals even as a surge in fossil fuel prices boosts the appeal of clean energy , a sustainability conference has heard. “There is a huge amount of work to be done from a regulatory perspective, to try to incentivise both supply and demand of green financing ,” said Miranda Carr, the Singapore-based global head of applied ESG and climate research at indices compiler MSCI. “Without a systematic and wider regulatory push to do it, what we are seeing in quite a few markets [in the region] is very little issuance compared to the European market where there are much more incentives in place.” She was speaking at the SCMP Asia Sustainability conference on Tuesday. Green financing in Asia typically funds renewable energy projects that will help decarbonise the region’s fossil-fuel reliant economies. The sharp rise in natural gas prices caused by Russia’s invasion of Ukraine has seen Asian and European nations increase their use of more carbon-intensive coal that will work against their climate goals in the short term. However, the price surge could have a different impact in the long term, Carr said. Higher fossil fuel prices may encourage faster development of renewable energy. It could also lead to greater energy security, as nations increasingly reduce their reliance on fossil fuel imports, she added. While China and Singapore have done a lot of work to promote green bond sales and green loans to fund clean energy projects, such initiatives need to be stepped up in other Asian countries that have lagged behind, Carr noted. Hong Kong financial intermediaries issued or arranged US$56.6 billion worth of green and sustainable debt in the city last year, four times the amount in 2020, Acting Secretary for Financial Services and the Treasury Joseph Chan Ho-lim told the conference on Wednesday. That accounted for a third of the volume in Asia. “[The government] will try to lead by example, to show the market how a green bond can be properly issued and also the type of information that needs to be communicated,” he said. In the last few years, the Hong Kong government alone has issued US$10 billion of green bonds , he noted. Their proceeds must be used to fund specific projects with environmental benefits. The government has committed to make disclosures on the benefits and use of proceeds that conform to international standards. Incentives are needed for both issuers and investors when it comes to green bonds, Carr said. For example, Singapore and Hong Kong have adopted regulations that compel listed firms and asset management firms to make climate-related financial disclosures, which help drive issuances and investment. However, Asian-listed firms’ sustainability reporting has much room to improve to meet the needs of investors, according to professionals who use the information. Companies sometimes neglect to provide enough data or maintain consistent time periods for reporting, which makes it impossible for users to make meaningful comparisons, Nneka Chike-Obi, Asia-Pacific head of ESG research at ratings provider Sustainable Fitch, told the conference. “Most of the time, it’s tonnes and tonnes of words, some pictures of trees, maybe a picture of a smiling worker,” she said. “Asian companies, whether they’re ready or not, are going to have to be increasing the quality of their reporting quite quickly. And that’s because there’s a lot of disclosure regulation that’s coming in many jurisdictions around the world.” Hardik Shah, the ESG practice lead at investment firm GMO, said the lack of quality reporting has made the work of analysts “painful”. “A few years back we had the issue of under-reporting, and now we have everything but the kitchen sink thrown at us,” he said. Meanwhile, region-wide, government-led cooperation on putting a price on carbon emissions and building infrastructure to connect national energy markets would greatly improve the efficiency of clean energy investments in Asia, said David Smith, senior investment director at UK-based abrdn which manages some 465 billion pounds of client assets.