The Monetary Authority of Singapore (MAS) expanded its Finance for Net Zero action plan to include transition finances in the central bank’s previously published strategy, as the regulator doubles down on its net-zero transition and decarbonisation efforts in the Singapore region.
“Asia is the key battleground in this war against climate change because Asia emits about half of global greenhouse gas emissions,” Lawrence Wong, deputy chairman of MAS, said in a speech at the National University of Singapore on 20 April.
Wong, who is also deputy prime minister and minister for finance, said that while Asia produces a lot of greenhouse gas emissions, “millions of people in the region still do not have access to electricity, modern sanitation and drinking water”, which poses many challenges when trying to combat climate change.
“We will have to find a way to ensure an orderly, and also a just, energy transition in Asia… Singapore’s own emissions are small but as a major financial centre for the region, we will do our part,” he added.
MAS’s new action plan outlines the central bank’s strategies to safeguard against greenwashing risks and promote consistent and reliable climate data. This includes requiring ESG ratings and data product providers to disclose transition risks and how they are factored into their products. The regulator will also work to provide clearer definitions of what activities are considered green, dirty or transition.
Wong said the central bank was also working with the International Sustainability Standards Board to create a roadmap on climate disclosures for companies.
In addition, MAS will continue to identify climate-related financial risks in its climate scenario analysis and stress tests, as well as work with international partners to develop regional decarbonisation pathways.
MAS also announced plans to set aside S$15mn to expand its sustainable bond and loan grant schemes. The grant schemes will also be expanded to include transition bonds and loans. Last year Singapore issued S$30bn worth of sustainable debt.
Wong noted that the central bank was also looking to leverage green fintech solutions, such as the ESGenome reporting tool piloted with the Singapore Exchange last year.
The entire region needs “to move quickly to decarbonise the economy”, Wong said.
“The scale of this transition is massive, and there are no easy answers or silver bullets. But if we apply the collective knowledge and resources of our partners in the financial sector and beyond, we will be able to tackle the challenges ahead, and also benefit from the growing new opportunities in the green economy,” he said.
This page was last updated May 8, 2023
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