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Business

Government bans fossil fuels, mining from green financing schemes

Elijah Felice Rosales - The Philippine Star
Government bans fossil fuels, mining from green financing schemes
Fossil fuels, when burned, release carbon dioxide and other greenhouse gases, making them major contributors to global warming.
Steve Buissinne via Pixabay

MANILA, Philippines — The government has moved to mitigate the damage of fossil fuel production and extractive mining to the environment by restricting investors’ access to sustainable financing schemes.

Under the Sustainable Finance Framework, the government listed ways to raise funds through green, social or sustainable bonds, loans and similar debt instruments.

The financing instruments, proceeds of which will be used to fund social projects, should comply with the International Capital Market Association’s green bond principles, social bond principles and sustainability bond guidelines, as well as the ASEAN Green Bond Standards and the Loan Market Association’s Green Loan Principles.

The framework requires the government to deploy proceeds from sustainable finance to eligible projects that promote environmental protection and social intervention. These projects include access to essential goods, affordable basic infrastructure and food security.

The government can also use sustainable finance to bankroll measures that will generate employment opportunities, advance socioeconomic rights and provide affordable housing.

In response to the pandemic, funds can also be allocated for COVID expenditures, such as the manufacture of essential supplies and medical products.

Likewise, proceeds from sustainable finance must be directed to efforts to promote clean transportation, adapt to climate change and manage environmental assets.

Resources should be poured as well into projects mainstreaming the development, operation and distribution of renewable energy like biomass, geothermal, hydropower, solar and wind.

On the other hand, the framework disallows spending any proceeds from sustainable finance on fossil fuel production and extractive mining.

Similarly, it prohibits funding projects that manufacture alcoholic and tobacco products, produce lethal weapons and military equipment, encourage gambling activities, involve conflict minerals, and engage in the logging business. The framework allows investments in palm oil plantations if these are accredited by the Roundtable on Sustainable Palm Oil.

The framework also excludes projects associated with child and forced labor and the involuntary displacement of residential communities.

Further, it bars the government from using sustainable finance for activities that infiltrate indigenous lands or are situated near protected areas.

The government plans to offer its first-ever green bonds this year to maximize public and private funds in pursuing sustainable projects.

In doing so, it intends to widen its financing options for raising infrastructure that can contribute in reaching the national goal of reducing greenhouse gas emissions by 75 percent by 2030.

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