Low-income countries are targeting reduced environmental and social risks, new green finance opportunities, small and medium enterprise finance, lending to women, and financial inclusion as essential components of sustainable finance, according to a new report released by the IFC-facilitated Sustainable Banking Network (SBN).

The report, Necessary Ambition: How Low-Income Countries Are Adopting Sustainable Finance to Address Poverty, Climate Change, and Other Urgent Challenges, considers the drivers and innovation that underpin sustainable finance efforts in low-income countries and captures lessons that will benefit other emerging markets.

Representing 86 per cent ($43tr) in banking assets in emerging markets, SBN includes 11 countries classified as low-income by the World Bank Group’s International Development Association (IDA). These countries had gross national income per capita below an established threshold of $1,175 in fiscal year 2020.

The report found that SBN IDA members’ top priorities for future action include promoting green finance, such as green bonds and green loans, developing sustainable finance roadmaps, and supporting sustainable finance implementation. Continued support is needed from the international community to strengthen financial institutions and realize new investment opportunities.

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