China has come top in a new ranking of green central banking in the East and south-east Asia region. However, the scorecard shows that policymakers and financial regulators in all the countries assessed need to do much more to make their economies more resilient given the looming threats from climate change.
The first East and Southeast Asia Green Central Banking Scorecard, published by Positive Money, analyses green monetary and financial regulation policies in the Association of Southeast Asian Nations (Asean), plus China, Japan and South Korea which are collectively known as Asean+3. Positive Money has produced the Green Central Banking Scorecard for the G20 since 2021, in which China currently ranks sixth.
“Countries in the Asean+3 are being heavily impacted by the worst effects of climate breakdown, but many remain structurally locked into fossil fuel extraction,” said Joe Herbert, senior researcher at Positive Money and lead author of the report.
“Crucial to changing this is large-scale green investment, and central banks have a key role to play in guiding finance away from the expansion of fossil fuel projects and towards the scaling up of clean energy.”
Policies that contributed to China’s top ranking include the People’s Bank of China’s (PBoC) climate stress testing of the banking system, green finance guidelines for banks and insurers, low-interest funding for loans for carbon reduction projects, and the incorporation of green bonds in the PBoC’s collateral framework
“Given the level of political and economic influence China has, its progress in green central banking is not just of domestic importance, but has the capacity to shape and expedite decarbonisation and economic transformation away from ecologically damaging activities throughout the region,” the report says.
The scorecard is based on literature reviews, expert consultations and direct communications with the institutions studied, Positive Money said.
‘A long way to go’ for green central banking in Asia
Apart from China, the scorecard shows that the other countries with the most developed policies are Malaysia, Singapore, Indonesia, the Philippines and Japan. A common factor linking several of the highest-scoring central banks was strong coordination with their respective national governments.
“Green central banking in the region is at an early stage of development on the whole, and has a
long way to go in order to reach the standards commensurate with addressing global ecological breakdown and building a just green transition for the region,” according the report.
The report said the strongest area of progress in the region was in green financial regulation, such as imposing higher capital requirements against investments in ecologically destructive sectors. However, monetary policies tools – such as adapting collateral frameworks and lending schemes to restrict financial flows to sectors most responsible for ecological breakdown – are less well developed.
“Even the best-performing countries in our scoring framework – headed up by China – achieve less than half the total available points,” the report says. “No country has so far implemented policies we classify as ‘high impact’; those that directly shift finance away from the most environmentally harmful sectors, such as fossil fuel production.”
Central bankers and regulators in the region should take more account of novel risks like those stemming from climate change and nature degradation as well as ageing populations, advances in artificial intelligence and digitalisation, according to a separate report published recently by the Asean+3 Macroeconomic Research Office (Amro) and the Council on Economic Policies.
Aziz Durrani, team lead for technical assistance at Amro and co-author of the report, said countries at the top of Positive Money’s scorecard need to ensure climate regulations have some teeth, for example implementing higher capital requirements for those financial institutions with the weakest results in climate stress tests.
“If it’s not going to hit the bottom line, it’s not going to drive changes in behaviour and that’s what we really need. However, this is also an opportunity for Asean+3 economies to step forward and take charge of the climate debate, and help to set the climate and nature risk agenda in a manner that better suits the region from both a regulatory and a sustainable growth perspective,” Durrani said.
Leave no country behind
The scorecard noted that Vietnam, Cambodia, Laos, Brunei and Myanmar are only at very early stages of exploring green central banking policies, which is unsurprising given resource constraints, wars, the aftermath of colonialism and tariffs.
Thailand and South Korea sit between the top performers and those at the bottom of the table. It added that sixth and eighth place are underwhelming positions for Japan and South Korea to achieve as they are being outperformed by several countries with comparatively lower capacities and historical contributions to climate change.
It remains a challenge to get companies to take the climate issue seriously, which has become even harder as US president Donald Trump has pushed an anti-climate agenda, says Sayuri Shirai, professor of economics at Keio University and an advisor for sustainable policies at the Asian Development Bank Institute.
“Even in Japan, relatively smaller companies don’t pay attention to the climate. It takes time because companies see the climate issue as very bothersome especially after the US changed policy,” Shirai said. “After the shift of the US, it gave people an excuse.”
Positive Money said the scorecard should be a benchmark against which future progress can be measured, adding that it hoped that the Asean+3 collaborative platform and bilateral partnerships would be used to make sure that no country is left behind.
“Countries with greater economic power and larger historical contributions to environmental degradation should lead the charge here, and support the most vulnerable countries to develop their own green central banking policies, both within the region and beyond,” Herbert said.
This page was last updated September 9, 2025