The Bank for International Settlements (BIS) on February 25 launched the Asian Green Bond Fund, an open-end fund for central bank investments in high-quality bonds issued by sovereign states, international financial institutions and companies.

In a press release, the BRI said the fund is dedicated to helping finance investments in green projects in the Asia-Pacific region – in response to growing demand for climate-friendly investments.

“This fund initiative will help central banks incorporate environmental sustainability goals into their reserve management,” he said.

According to the statement, the National Bank of Cambodia (NBC) is a member of the advisory board that supported this initiative and will be among the first subscribers to the fund, which is an innovative step towards sustainable financing.

“As climate change is increasingly seen as one of the main sources of uncertainty for economic growth and could have a negative effect on social and environmental conditions, green finance opens up many profitable avenues investors to help protect the planet.

“While generating profits, investing in green bonds can also contribute to positive environmental impacts, as it is designed to finance green projects or environmentally friendly businesses in the region. This in turn leads to an increase in green innovations and promotes sustainable development,” he said.

NBC Governor Chea Chanto recognizes the financial risks and rewards of investing in green bonds as well as protecting the Earth. He said the central bank plays a role in helping to mitigate financial risks triggered by the impact of climate change on economic, social and environmental conditions.

“We believe that every institution and individual can play a role in contributing to equitable and sustainable growth by reducing the rapid pace of climate change and its channels of spread.

“We strongly encourage all financial institutions to put in place policies that promote green finance and support climate-friendly investments,” he said.