Central banks in East and Southeast Asia are increasingly being judged not just on their ability to maintain price stability and financial soundness, but also on how they respond to the climate crisis. The newly released East and Southeast Asia Green Central Banking Scorecard by Positive Money provides the clearest picture yet of how the region’s monetary authorities are aligning financial systems with ecological priorities. The findings highlight both promising developments and persistent shortcomings.
China sets the pace, but gaps remain
The report ranks China at the top of the regional scorecard, reflecting initiatives such as climate stress tests, green bond collateral frameworks, and concessional lending for decarbonisation projects. Malaysia, Singapore, Indonesia, the Philippines, and Japan follow, forming a leading tier of central banks that are taking tangible steps to incorporate climate considerations. Yet even these frontrunners achieve less than half of the total possible score, showing that much more remains to be done.
Regulation outpaces monetary tools
Across the region, financial regulators have made progress in areas such as climate risk disclosure, green taxonomies, and capital adequacy rules. These measures are important for transparency and risk management, but they do not necessarily shift the flow of finance at scale.
By contrast, the use of monetary tools (such as adjusting collateral frameworks to favour green assets, or restricting central bank support for fossil fuel lending) remains limited. In effect, central banks are better at studying the risks of climate change than at deploying their balance sheets to confront it.
Climate financing remains a bottleneck
The report underscores that Asia is far off track in mobilising the investment needed for a green transition. Estimates suggest trillions of dollars will be required for clean energy and infrastructure, yet few central banks are directly steering capital flows. Singapore’s Monetary Authority offers a rare bright spot, having recently secured $510 million for a regional “Financing Asia’s Transition” blended fund aimed at de-risking green infrastructure projects.
Elsewhere, however, poorer ASEAN countries such as Vietnam, Cambodia, Laos, and Myanmar are struggling to raise sufficient funds, largely due to weaker institutional capacity and underdeveloped green finance markets.
Mandates and mindsets hold central banks back
A recurring issue identified in the scorecard is that many central banks still interpret their mandates narrowly, focusing on inflation and stability while treating climate action as beyond their remit. This stance reinforces a reliance on “market neutrality,” which in practice allows environmentally harmful lending to continue unchecked. The report argues for adopting broader mandates that recognise climate and ecological risks as integral to financial stability.
The path forward: coordination and bold tools
The scorecard calls for stronger coordination between central banks and fiscal authorities, ensuring that monetary policy supports national green investment strategies. It also highlights the need for high-impact tools—such as concessional green lending schemes, collateral tilts away from fossil fuel assets, and stricter capital requirements for polluting sectors. Moreover, wealthier countries with historical emissions responsibility are urged to support lower-capacity peers in building effective green financial frameworks.
A region at a crossroads
The report makes clear that while some progress has been made, East and Southeast Asia’s central banks are not yet rising to the scale of the ecological challenge. Without bold policy shifts and accelerated climate financing, the region risks being locked into high-carbon pathways just as the world needs rapid decarbonisation.
The scorecard is thus both an assessment and a call to action: central banks must move from cautious steps to transformative measures if they are to safeguard financial stability in a climate-constrained century.
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