Unlocking Adaptation Finance in ASEAN: The Launch of the mARs Guide Whitepaper
The ASEAN region has made meaningful progress in recent years toward establishing a common language and framework for sustainable finance. At the centre of this effort is the ASEAN Taxonomy for Sustainable Finance (ASEAN Taxonomy), a classification system designed to guide capital flows into sustainable activities across ASEAN Member States (AMS).
The ASEAN Taxonomy aims to reduce fragmentation across jurisdictions, strengthen investor confidence and signal to markets and project developers which economic activities are likely to attract sustainable finance. While the taxonomy provides a solid foundation for advancing sustainable finance in the region, further enhancements to its usability and functionality for adaptation-specific purposes could play a significant role in unlocking additional investment for climate resilience.
To support this aim, the United Nations Environment Programme Finance Initiative (UNEP FI), the ASEAN Capital Markets Forum (ACMF), and the Sustainable Finance Institute Asia (SFIA) have released the Phase 1 Whitepaper on Key Principles and Methodological Approaches for the Development of the Mitigation Co-benefit and Adaptation for Resilience (mARs) Guide. This Whitepaper serves as the methodological starting point for developing the mARs Guide.
The mARs Guide is designed to complement the ASEAN Taxonomy by supporting users in conducting Environmental Objective 2 (EO2) assessments under both the Foundation Framework and the Plus Standard. It will outline the defining features of adaptation-related technologies and solutions within specific activities, including their purpose, role in adaptation, maturity, scalability, target beneficiaries, sphere of influence and potential environmental, social, and economic benefits including transformational impacts.
As Phase 1 of the mARs Guide development, the Whitepaper focuses on mapping national adaptation plans (NAPs) and related national strategies across AMS, along with reviewing international sustainable finance taxonomies and frameworks that address adaptation-related sectors. This mapping aims to identify shared principles, good practices, and methodological approaches that can be tailored to the ASEAN context. This ensures that the Guide is regionally relevant, evidence-based, and aligned with both local needs and global frameworks.
The Whitepaper also introduces a preliminary set of key principles to guide the design of the mARs Guide. These build on the five core principles of the ASEAN Taxonomy and the EO2 Guiding Principles, with added specificity for adaptation-related assessments:
- Science-based and evidence-led
- Context-relevant and locally prioritised
- Inclusive across ASEAN Member States
- Maladaptation risk management (uncertainty-aware)
- Interoperable and comparable
- Usable for finance and the real economy
Developed through extensive consultation with stakeholders across the region, including both users and providers of capital, the mARs Guide will supplement the ASEAN Taxonomy by clarifying what constitutes adaptation finance and how to assess resilience outcomes. In doing so, it reduces ambiguity, lowers transaction costs, increases comparability, and strengthens investor confidence. These improvements are essential for unlocking larger flows of public and private capital into climate adaptation projects and activities.
Cadlas remains committed to fostering a more resilient future by enabling informed, impactful investment in climate adaptation and resilience across ASEAN. We look forward to sharing further updates on how the mARs Guide will help transform the region’s sustainable finance landscape.
