The Monetary Authority of Singapore (MAS) and the People’s Bank of China (PBC) have established the China-Singapore Green Finance Taskforce (GFTF). The aim is to deepen bilateral cooperation in green and transition finance between Singapore and China.
Moreover, the GFTF will facilitate greater public-private sector collaboration. The aim is to work together to meet Asia’s needs as it transitions to a low carbon future.
The GFTF’s inaugural meeting was hosted on 21 April in Chongqing. The parties discussed joint initiatives aimed at scaling up green and transition financing flows between Singapore, China and the region.
Singapore China GFFT priorities
- Taxonomies and Definitions. MAS and PBC will work together under the International Platform on Sustainable Finance (IPSF). The aim is to achieve interoperability between the Singapore and China taxonomies. They will collaborate subsequently to enhance the use of the IPSF’s Common Ground Taxonomy. In addition, there is a drive to deepen understanding of transition activities defined by China and Singapore.
- Products and Instruments. Singapore Exchange and China International Capital Corporation will establish a workstream to strengthen sustainability bond market connectivity between China and Singapore. This includes the issuances of and mutual access to green and transition bond products in China and Singapore.
- Technology. Metaverse Green Exchange and Beijing Green Exchange will establish a workstream that leverages technology to facilitate sustainable finance adoption. This includes piloting of digital green bonds with carbon credits.
The GFTF is co-chaired by MAS’ Assistant Managing Director (Development and International) and Chief Sustainability Officer, Gillian Tan, and Chair of the China Green Finance Committee, Dr Ma Jun. Members comprise senior representatives and sustainable finance experts from financial institutions and green FinTech companies from Singapore and China.
“We are pleased to deepen our collaboration in green and transition finance with the establishment of the GFTF,” said Tan. Tan added: “The GFTF provides a platform for knowledge exchange. It will galvanise collaboration between public-private participants from China and Singapore on concrete initiatives that will catalyse capital flows to support a credible and inclusive transition to a low carbon future for our countries and the region.”
MAS Launches Finance for Net Zero Action Plan
In a separate announcement, MAS is launching a Finance for Net Zero (FiNZ) Action Plan. The initiative sets out MAS’ strategies to mobilise financing to catalyse Asia’s net zero transition and decarbonisation activities in Singapore and the region. It expands the scope of MAS’ Green Finance Action Plan.
This was launched in 2019 to include transition finance. Transition finance incorporates investment, lending, insurance, and related services to progressively decarbonise areas such as power generation, buildings, and transportation.
Singapore FiNZ Action Plan priorities
Data, Definitions & Disclosures
MAS says that it will continue to promote consistent, comparable, and reliable climate data and disclosures. The aim is to guide decision making by financial market participants, and safeguard against greenwashing risks.
Climate Resilient Financial Sector
MAS will continue to engage FIs to foster sound environmental risk management practices. In addition, it will deepen climate scenario analysis and stress testing to identify climate-related financial risks. MAS will incorporate evolving international best practices in the supervision of FIs’ transition planning.
Credible Transition Plans
To support FIs’ adoption of science-based transition plans, MAS will engage international partners such as the International Energy Agency to support the development of credible regional sectoral decarbonisation pathways. FIs can reference these pathways when they set emissions reduction targets, and when they engage with their clients on initiatives to decarbonise their businesses.
Green & Transition Solutions & Markets
MAS will promote innovative, credible green and transition financing solutions and markets to support decarbonisation efforts and climate risk mitigation.
MAS sets aside S$15m for enhanced grants
MAS says that it will expand the scope of its sustainable bond and loan grant schemes. These will include transition bonds and loans, with safeguards in place to mitigate the risk of “transition-washing”.
MAS has set aside S$15m ($11.25m) over the next five years for the enhanced grant schemes.