The Development of Green Bond in Developing Countries: Insights from Southeast Asia Market Participants

Abstract

Given the increasing importance of green bond as the main funding source for the Sustainable Development Goals, the green bond is an emerging concept in the region of Southeast Asia. In addition, the concurrent Covid-19 pandemic has caused disruption to the development of green bond around the world. This research explores the current development status of the green bond in Southeast Asian countries. A total of thirty-two semi-structured interviews were held with capital market participants in Southeast Asian countries. The results highlight barriers, opportunities, and regulation difficulties, and expected growth for the development of the green bond market. This research is concluded by indicating several propositions that can be tested in the future to generalize the findings from this work. We thus extend the knowledge of green bond in the financial markets of Southeast Asian countries, which also delivers implications for practitioners and policy-makers regarding the development of green bond in Southeast Asian countries.

Environmental Taxation and Green Economics in Southeast Asia

“…The causal relationship between energy and the environment in Southeast Asia has been analyzed and studied in the last decade such as the research of Siala et al(2021) [45], He et al(2021) [12], and Nguyen et al(2022) [27]. Energy cooperation and environmental sustainability are important collaborative economic agendas in Southeast Asia.…”

“…The environmental tax aims to deliver the benefits of Next Generation funds contingent on the effective transformation of the Southeast Asia economy into an innovative, inclusive, green, and digital economy [27]. To this end, the Recovery Plan considers a series of reforms and investments [45].…”

Green Bonds for Renewable Energy in Latin America and the Caribbean

“…Therefore, the region's low level of financial development is considered one of the leading causes of the RE financing gap. In the same line, Nguyen et al (2022) also attribute in part of the low importance of alternative financing mechanisms for RE in the Southeast Asian market to the strong presence of commercial banks.…”

Green financing for sustainable development: Insights from multiple cases of Vietnamese commercial banks

“…The transition to achieve sustainable development targets proposed by the Vietnamese government requires substantial purchase and investment in new cleaner operational technologies, renewable energies, and climate-friendly infrastructures (Li et al, 2021). Given the limitations in government funding and support that are far below the needs of the economy and businesses in society to engage in sustainability practices seriously, the role of commercial banks is critical to fulfilling the financial support gap by providing solutions to enhancing the support for sustainability initiatives (Barua, 2020;Nguyen et al, 2022). In other words, commercial banks will play a more important role through the practice of the green financing initia- With regard to the drivers for green financing, our research reports that the green financing initiatives have been internally stimulated from the top management, who shows the high extent of sustainability awareness is in alignment with the sustainability movement in both the international and national business environment (Li et al, 2022).…”

“…Finally, the culture in each country and business environment has directly influenced the perception of demand for financial products and services (Barua, 2020; Nguyen et al, 2022). Thus, culture‐inspired bias and ideologies need to be considered carefully when developing green finance products and services (Awawdeh et al, 2021; Miah et al, 2021).…”