China and Singapore boost cooperation on green and transition finance

May 24, 2024|Written by |Monetary Authority of Singapore, People's Bank of China

The Monetary Authority of Singapore (MAS) and People’s Bank of China (PBoC) are set to boost their cooperation on green and transition finance, including by more closely aligning their taxonomies and developing a new platform for sharing companies’ environmental data.

The announcement follows a second meeting of the China-Singapore Green Finance Taskforce (GFTF), which was set up last year with a view to increasing the flow of green and transition finance between the two countries via both public and private sector initiatives, as well as more widely in Asia.

“The GFTF is a key platform for China and Singapore to jointly develop concrete and meaningful initiatives to advance green finance cooperation,” said Gillian Tan, chief sustainability officer at MAS and co-chair of the taskforce.

“The wide range of deliverables announced today is testament to the strong collaboration between MAS, PBC and industry partners from both countries and our shared ambition to mobilise the financing required for an effective transition to net zero in the region.”

MAS said it would complete the mapping of its Singapore Asia Taxonomy, which was launched in December, to the Common Ground Taxonomy (CGT) by the end of 2024 to facilitate the cross-border issuance of green finance bonds and loans involving Chinese and Singaporean banks and companies.

Based on the taxonomies of the EU and China, the CGT is a green investment classification that was set up last year to make it easier to compare the sustainability of business projects in different countries.

MAS and the PBoC also said they had conducted an industry capacity-building session on “transition taxonomies”. Pioneered by Singapore, transition taxonomies are intended to account for Asia’s context of rapid economic development at a time when many of the region’s governments are also committed to reaching net-zero in the coming decades.

The two central banks also announced private sector initiatives such as a programme to boost issuances of green “panda” bonds, the term used to describe onshore renminbi-denominated bonds issued by foreign entities within China.

“MAS will provide support to encourage such financing flows through grant schemes,” the announcement added.

The two sides also hope to boost access to data on companies’ environmental footprint through a joint carbon accounting and decarbonisation rating platform developed by Singaporean fintech firm Metaverse Green Exchange and Beijing Green Exchange.

“The platform will, amongst other things, aggregate Chinese corporates’ carbon emissions data to support Singapore and Chinese financial institutions in structuring green financing solutions for these corporates,” MAS said.

This page was last updated May 27, 2024

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