# Green Finance: Harmonizing Sustainability with Economic Resilience

- Link: https://www.thailand-business-news.com/asean/196602-green-finance-harmonizing-sustainability-with-economic-resilience
- Published: 2025-08-12T07:29:00+07:00
- Author: News Desk

The analytical note explores green bonds in ASEAN+3, emphasizing their advantages
such as lower borrowing costs and the mitigation of greenwashing risks. It underscores
the importance of regulatory measures to ensure financial stability and achieve 
sustainability objectives.

## The Role of Green Bonds in Sustainable Growth

This analytical note delves into the financial stability effects of green bonds 
in the ASEAN+3 region. It underscores green bonds‘ contribution to fostering a sustainable
economy while identifying inherent risks. With green finance seeing rapid growth
driven by sustainable lending and initiatives like green bonds, the region is positioned
for continued development. However, potential threats such as greenwashing and stranded
assets might challenge this stability, suggesting the need for careful oversight
and management within the burgeoning green finance sector.

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## Price Premium and Financial Stability

Our analysis indicates that green bonds present a price premium of 15 basis points,
which helps reduce borrowing costs and alleviates repayment risks. This can promote
financial stability by offering more favorable financing terms. Despite these advantages,
the issuance of green bonds does not always translate to decreased carbon emissions
by firms in the region. This discrepancy raises concerns about greenwashing, where
investments may appear environmentally friendly without delivering substantive environmental
benefits, thus potentially affecting investor confidence.

## Mitigating Risks with Regulatory Oversight

To mitigate these identified risks, the implementation of robust green taxonomies,
stringent regulatory oversight, and green central banking policies is essential.
Ensuring transparency and adherence to genuine sustainable practices can safeguard
investor trust and secure asset values. By addressing these challenges head-on, 
green bonds can effectively contribute to achieving climate goals while ensuring
the financial resilience of the ASEAN+3 region. Strengthening these frameworks will
ensure that green financial products remain beneficial in fostering economic and
environmental sustainability.

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Source: [ASEAN+3 Macroeconomic Research Office ](https://amro-asia.org/green-finance-balancing-sustainability-and-financial-stability)