Financial battle against climate change – assessing effectiveness using a scorecard

Abstract

Purpose

This paper aims to investigate how and to what extent the Fijian sustainable banking regulations or guidelines are designed, communicated, implemented and monitored within the financial system in Fiji. A scorecard is introduced for this purpose to assess the effectiveness of Fiji’s financial battle against climate change (FBACC).

Design/methodology/approach

This study uses a mixed-method methodology. Data were collected mainly from a survey and supplemented by interviews, observations and documents. The scorecard was developed by building on existing two theoretical frameworks, namely, the Sustainable Banking Assessment and Climate Change Governance Index, to make them more appropriate and practically applicable to less developed financial systems in emerging economies such as Fiji. This FBACC scorecard consists of four perspectives, eight critical factors and 24 criteria.

Findings

The results show that the overall FBACC score averages 40.75%, and all the perspectives scored below 50%, the benchmark. Only the CF “policy” scored 54.25% because of a high positive response of 82.3% for the “political leadership” criterion. The relative contributions of each perspective in constructing the overall score are distributed as 28%, 25%, 24% and 23% among planning, action, accountability and control, respectively.

Research limitations/implications

These results were complemented by the information shared during the interviews and confirmed that the existing political initiatives need to be effectively communicated and/or implemented in the financial system by the regulatory agencies.

Practical implications

This FBACC scorecard can be applied to other underdeveloped systems in emerging countries to assess the effectiveness of the sustainable banking regulations and/or guidelines in those countries in relation to the FBACC. It can also be applied to individual firms to assess their contribution to the FBACC.

Originality/value

To the authors’ best knowledge, this might be the first study in Fiji that considers the impact of climate-related financial risk on the Fijian financial system.

Citation

Saliya, C.A. and Pandey, S.K. (2021), "Financial battle against climate change – assessing effectiveness using a scorecard", Qualitative Research in Financial Markets, Vol. 13 No. 2, pp. 141-160. https://doi.org/10.1108/QRFM-05-2020-0087