Singapore’s new central bank chief launches sustainable finance body

January 31, 2024|Written by |Monetary Authority of Singapore

Singapore’s new central bank chief has set out his vision for boosting the city-state’s reputation as a green finance hub, at the launch of a new body to develop the  sustainable finance sector.

Chia Der Jiun, who took over as head of the Monetary Authority of Singapore (MAS) on January 1, called on financial institutions, businesses, government agencies and academics to work together to speed up the transition to a low-carbon economy.

Speaking at the launch of the Singapore Sustainable Finance Association (SSFA) on 24 January, Chia said he hoped the new body could help develop “industry best practices in areas such as carbon credits trading and transition finance”.

The SSFA brings together professionals from the financial services sector along with other business representatives, academics and NGOs. It plans to focus on five key areas in 2024: carbon markets, transition finance, blended finance, natural capital and biodiversity, and taxonomy.

“Today, Singapore is one of the leading sustainable finance centres serving the net-zero transition needs in Asia and beyond,” Chia told the launch event, noting that MAS in October became “one of the first jurisdictions to propose supervisory expectations for financial institutions to have sound transition planning processes”.

“Just last month, we launched the Singapore-Asia Taxonomy,” he added. “The taxonomy is the world’s first to pioneer the concept of a ‘transition’ category, in recognition of Asia’s needs.”

Under Singapore’s taxonomy, transition activities are those that do not currently meet the criteria to be considered green, but are on a pathway to net zero. The category includes, for example, Singapore’s existing geothermal, hydropower and bioenergy plants.

Chia identified several areas where he sees room for improvement in Singapore’s green finance set-up.

Firstly, he said MAS was working on further developing standards to reduce greenwashing and provide “greater confidence for capital to be channelled to legitimate green and transition activities”.

MAS is working with international organisations such as the International Energy Agency to develop industry-specific pathways to decarbonisation, which take Asia’s context into account, Chia said.

He further called for financial institutions to find more ways of pushing more private capital towards projects that are good for the planet but commercially unattractive, and to ensure that workers in the finance sector have the skills needed to address the climate crisis.

He added that the new SSFA could help achieve all of these goals, including by bringing together banks and industry to improve the financial viability of green projects using risk mitigation tools and other approaches.

The SSFA will be initially co-chaired by Deborah Ho, who leads BlackRock in Singapore and the wider south-east Asian region, and HSBC’s Singapore CEO Wong Kee Joo.

This page was last updated February 1, 2024

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