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The Diplomat
02-07-2025
- Business
- The Diplomat
Asian Universities Rise in Global Sustainability Leadership Rankings
Amid global SDG funding gaps, Asian universities are stepping up as leaders in sustainable finance, driving research and innovation to shape a more sustainable future. As global efforts to achieve the Sustainable Development Goals (SDGs) face mounting financial shortfalls, universities across Asia are emerging as key players in sustainable finance. The Times Higher Education (THE) Impact Rankings 2025 highlight a growing presence of Asian institutions in sustainability leadership, with 22 of the top 50 universities now coming from the region – an 83 percent increase from the previous year. This shift comes at a critical moment. According to the U.N. Sustainable Development Report 2024, only 15 percent of SDG targets are on track, while more than 30 percent show stagnation or decline. The financing gap is particularly severe in emerging economies, where governments struggle to mobilize resources for climate action, education, and infrastructure. Universities, traditionally seen as knowledge producers, are now being recognized for their role in sustainable finance, bridging research with policy and investment strategies. Meeting SDG targets requires more than institutional commitment – it demands financing on a scale that traditional sources are unlikely to deliver. According to Indonesia's Ministry of National Development Planning (Bappenas), the country faces a funding shortfall of $1.7 trillion by 2030 to meet its SDG commitments. Similar gaps exist across Southeast Asia, where declining international aid and rising fiscal pressures have forced governments to seek alternative financing mechanisms. Universities are increasingly stepping into this space. Academic research centers contribute to the design of financial taxonomies, ESG standards, and impact measurement tools, helping governments and investors align funding with sustainability goals. Institutions are also engaging in green bonds, sustainability-linked loans, and blended finance models, providing expertise in structuring financial instruments that attract both public and private capital. The THE Impact Rankings assess universities based on their contributions to the United Nations SDGs, measuring research, teaching, stewardship, and outreach. While traditional academic rankings have long been dominated by institutions in North America, the United Kingdom, and Australia, the Impact Rankings reveal a shifting landscape. Asian universities are increasingly setting benchmarks in sustainability and social impact, leveraging their expertise to influence policy and investment decisions. In Indonesia, universities are collaborating with development banks, regulators, and ministries to build capacity and provide evidence-based recommendations for sustainable finance. Research centers at institutions such as Universitas Airlangga, Universitas Indonesia, Institut Teknologi Bandung, and Universitas Gadjah Mada have contributed to policy frameworks on carbon pricing, renewable energy investment, and climate finance governance through Islamic social finance. Beyond research, universities also facilitate training for government officials and financial professionals, ensuring that sustainability principles are integrated into national and corporate financial planning. Their role in convening public and private actors is critical, especially in a fragmented policy environment where coordination between stakeholders remains a challenge. Recognizing the growing influence of higher education in sustainable finance, the United Nations has included an Academic Day in the Fourth International Conference on Financing for Development (FFD4), scheduled for July 2, 2025. This marks the first formal participation of universities in global development financing discussions, where they will present research on financing strategies and enabling conditions for SDG investment. The inclusion of universities in FFD4 reflects a broader recognition that higher education institutions are not just passive recipients of funding but active contributors to financial innovation. Their ability to generate knowledge, test financial models, and engage with policymakers positions them as critical actors in shaping the future of sustainable finance. Sustainable finance is closely tied to education access, particularly in emerging economies. In Southeast Asia, gross tertiary enrollment rates vary widely. According to UNESCO, Malaysia exceeds 40 percent, Indonesia hovers around 36 percent, and Cambodia falls below 20 percent. Structural barriers persist, including declining international aid, rising tuition costs, and limited digital infrastructure. Universities are not immune to these challenges, but they retain a level of independence and public credibility that allows them to advance inclusive policies. Many institutions are expanding need-based scholarships, integrating community engagement into curricula, and promoting open-access research to extend knowledge beyond campus boundaries. The growing presence of Asian universities in sustainability rankings is more than symbolic — it signals a shift toward embedding sustainable finance within academic and institutional priorities. Visibility alone does not guarantee lasting impact. Long-term success depends on strategic alignment rather than short-term projects or publicity-driven initiatives. Universities cannot solve development challenges alone, but they offer a unique capacity: they generate knowledge, test financial models, and share insights across sectors. In a world of limited financial resources and increasingly politicized data, this contribution may become one of Asia's most valuable assets in global development. Originally published under Creative Commons by 360info™.
Scoop
30-06-2025
- Business
- Scoop
Faith In Finance: Indonesia's Innovative Path To Sustainable Development
The Southeast Asian country has already raised close to $12 billion in thematic bonds, including blue bonds and Islamic investment instruments over the last seven years. These efforts have been supported by development partners, including the United Nations. Putut Hari Satyaka, is the Deputy Minister for Development Financing and Investment at Indonesia's Ministry of National Development Planning (Bappenas). He spoke to UN News ahead of a key UN conference on financing for development which begins in Sevilla on 30 June. UN News: How much money is needed in Indonesia to achieve the SDGs and what is your estimated funding gap? Putut Hari Satyaka: The existence of an SDG financing gap remains a significant challenge, especially to developing countries. Indonesia is no exception. The financing gap to fully achieve all 17 goals and their targets remains significant. With an estimated $4.2 trillion needed for Indonesia to achieve the SDGs, there is a $1.7 trillion financing gap that is yet to be resolved. UN News: How can that gap be closed? Putut Hari Satyaka: We need an integrated and transformative approach, going beyond 'business as usual'. For us, this means two things. Firstly, we must enhance the use of public finances to be more efficient, resilient and transparent. This includes improving budgetary alignment with SDG targets, strengthening expenditure efficiency, and ensuring that resources are effectively prioritized and utilized for sectors generating spill-over transformative effects to sustainable development. Secondly, we must be creative and innovative – meaning that we need to scale up the existing innovative financing methods and explore new ones. Some of the most prominent instruments and approaches are blended finance, thematic bonds and faith-based financing. Indonesia has been making great progress in this regard. We have created an ecosystem of a wide range of innovative instruments, attracting a diverse range of stakeholders and entities, supporting necessary regulations, and developing the enabling environment to nurture the market. UN News: What is faith-based financing and what has been Indonesia's experience so far? Putut Hari Satyaka: Faith-based financing, especially within the Indonesian context, refers to financial practices grounded in religious principles, most notably, in the principles of Sharia law in Islam. As Indonesia has 241.5 million Muslims, 85 per cent of the population, and faith-based social financing like zakat and waqf have been a long-standing practice, deeply rooted in our society. What is new is the allocation of these instruments towards the SDGs. Indonesia has made strong progress in advancing Sharia finance as part of its inclusive growth agenda. Sharia financing is now growing by 14 per cent a year, outpacing conventional finance. We are also championing scaling-up, green sukuk, which is a Sharia-compliant bond specifically issued to finance environmentally friendly projects. This reflects Indonesia's strong commitment to building a competitive financial ecosystem for faith-based instruments, and we will continue to strengthen collaboration, drive innovation, and ensure that faith-based financing plays a central role in our economic development. UN News: Are you able to raise new funding through these faith-based instruments? Critics sometimes say this is just another way to reach the same funds you could get otherwise. Putut Hari Satyaka: Yes, we are. With the world's largest Muslim population, there is a massive potential in channeling faith-based financing towards the SDGs. In 2018, Indonesia issued the world's first sovereign green sukuk, raising $1.25 billion to fund renewable energy and climate adaptation projects. Between 2019 and 2023, the government raised approximately $1.4 billion through domestic retail green sukuk, engaging individual investors in climate financing. This demonstrates the strong potential of green sukuk, both domestically and internationally. We also see great potential in Islamic Social Financing. Indonesia's zakat potential is estimated at between $18 billion and $25 billion per year. The actual collection remains below 5 per cent of that potential, so there is clearly a vast opportunity to strengthen social finance. UN News: What lessons have you learned over the years and what advice do you have for national or subnational governments interested in faith-based financing? Putut Hari Satyaka: Although we have made great progress in faith-based financing, we have much room for enhancement, improvement and even exploration. Here are a few potential lessons: First and foremost, awareness raising is key. As many view faith-based financing also as community-based financing, society's participation in these instruments starts with their understanding of their importance and the way the money will be used. Secondly, we see that the close coordination and concerted actions of relevant stakeholders are crucial. Overlaps are unavoidable without proper coordination. It is coordination – including with subnational governments, where we see room for improvement in order to scale-up faith-based financing in Indonesia. Finally, building trust takes time. Faith-based financing relies heavily on public confidence, both in the institutions managing the funds and in how the funds are used. Just like many other financing instruments, we have learned that transparency, accountability and consistent communication are essential to earn and maintain that trust.
