Remarks by Charge d’Affaires Julie Chung at the “Association of Banks in Cambodia Sustainable Finance Initiative” Launch

(As Prepared for Delivery)
Phnom Penh
September 19, 2016

Your Excellency, Madame Chea Serey
Your Excellency Eang Sophalleth
Mr. Charles Vann
Members of the Association of Banks in Cambodia
Distinguished guests

Good morning! I am pleased to witness a commitment statement today that I believe is a significant step towards ensuring Cambodia’s economic, environmental and social sustainability.

We all recognize that unsustainable development and investments run the risk of not only damaging the environment, culture and our communities, but also cause challenges for us today and for future generations.

From 2014 to 2015, investment in Cambodia increased by 18 percent, and the IMF projects that Cambodia will be the seventh fastest growing economy in the world in 2016. Amidst this growth and potential for more growth, this is the right time to put commitments like this in place.

Integrating environmental and social principles into investment decisions is not only important to ensure long-term business growth, but it is also integral to protecting and sustaining the human and natural resources that Cambodia will need in the future. It is also vital that infrastructure investment be compatible with achieving the U.N. Sustainable Development Goals, particularly the need for low-carbon and climate resilient infrastructure. Success in financing sustainable development requires leadership from government and individuals, as you are doing here today.

Two weeks ago, President Obama spoke to many young leaders in the region at the Young Southeast Asian Leadership Initiative (YSEALI) town hall in Laos. He remarked that a key part of his foreign policy is to deepen ties with the people of Southeast Asia, and to have our governments work together to encourage sustainable development, protect our environment, and meet shared challenges like climate change. That’s why I want to recognize the young ASEAN Youth Ambassadors and YSEALI members dedicated to environmental protection who are here today; please give them a round of applause. They are reminders to all of us of why we are here today. Initiatives like this will further motivate the youth of Cambodia who are so committed to ensuring environmental sustainability in their country.

In Cambodia, investments that pose the biggest social and environmental risks are often the fastest-growing, such as large-scale infrastructure and industrial projects, transportation projects and special economic zones.

Through commitments like the one you are signing today, you are coming together to model good government and good business, and you are paving the way for other countries in the region. Linking lending to sound, socially responsible and sustainable development is necessary to provide for the needs of future generations.

I also congratulate you on joining the International Finance Corporation’s (IFC) Sustainable Banking Network.

The steps you have taken will reap tangible benefits for Cambodia, as it has done elsewhere. For example, after Mongolia embedded sustainability and environmental policies and protocols into its lending practices, the market opened up to deeper financing support from international lenders such as the IFC and the Development Finance Company (FMO).The IFC and FMO arranged a 108 million dollar syndicated loan from XAC bank in Mongolia due to the bank’s commitment and leadership in adopting and embedding strong sustainability and environmental risk management protocols.

We believe Cambodia can expect similar support once it progresses on its journey and the new principles are implemented effectively.

Our congratulations to the Association of Banks in Cambodia, its member banks and the Royal Government of Cambodia on the remarkable step you are taking today. We wish you much success ahead.