The Maldives Monetary Authority (MMA) and the International Finance Corporation (IFC) have entered a Cooperation Agreement to develop a Sustainable Finance Roadmap. The joint effort aims to integrate Environmental, Social, and Governance (ESG) risk management policies into financial operations.
Promoting Sustainable Finance
Sustainable finance, a concept advocated by the Sustainable Banking and Finance Network (SBFN), focuses on aligning financial activities with environmental and social objectives. With 77 member institutions representing 63 countries and over USD43 trillion in banking assets, the SBFN aims to enhance environmental and social risk management while facilitating capital flows toward sustainable activities.
The IFC, serving as the SBFN’s Secretariat and knowledge partner, provides crucial support to member institutions in designing and implementing sustainable finance initiatives.
The Sustainable Finance Roadmap, informed by experiences of SBFN member countries like Azerbaijan, Indonesia, and Ukraine, encompasses various pillars, including ESG Integration, Climate and Nature-related Risk Management, and Financing Sustainability.
Meanwhile, a recent World Bank report underscores the importance of safeguarding natural capital for countries like the Maldives, where the economy heavily relies on sectors such as tourism and fisheries. The report highlights the need for sustainable coastal development, pollution management, and resource conservation to ensure long-term prosperity.
Enhancing IFC’s Role in Maldives’ Private Sector
Given these challenges, the Maldivian government and the IFC in February discussed enhancing the institution’s role in private sector development. The partnership, which focuses on advisory services and fostering inclusive growth, aims to create opportunities while addressing environmental concerns.
As the IFC continues to support the private sector in Maldives, it emphasizes the importance of promoting resilience and inclusivity in economic development. By aligning financial practices with sustainability goals, IFC believes initiatives like the Sustainable Finance Roadmap can contribute to a more equitable and environmentally conscious future.
