Accelerating green finance in Singapore
30 August 2021
The Green Finance Industry Taskforce (“GFIT”), a financial industry taskforce convened by the Monetary Authority of Singapore, launched in May 2021 the following initiatives to accelerate green finance in Singapore through improving climate-related disclosures and fostering green solutions:
- a guide for climate-related disclosures;
- a framework to help banks assess eligible green trade finance transactions;
- a white paper on scaling green finance in the real estate, infrastructure, fund management and transition sectors; and
- a series of green finance workshops for financial institutions and corporates.
These initiatives are expected to help financial institutions align their portfolios towards facilitating Asia’s transition to a low carbon economy. The initiatives will also contribute to global efforts to achieve greater consistency and comparability in climate-related disclosures, as well as provide investors and market participants with the necessary information for climate risk analysis and investment decision-making. We elaborate on the GFIT initiatives below.
Guide for climate-related disclosures
The guide on implementing climate-related disclosures sets out best practices that are aligned with the recommendations of the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (“TCFD”) to help financial institutions prepare for mandatory climate-related disclosures from June 2022. The guide also outlines specific disclosure practices for each of the banking, insurance and asset management sectors, so as to facilitate more consistent and comparable disclosures across financial institutions.
Framework for green trade finance
The framework for green trade finance and working capital provides a principles-based approach for banks to assess eligible green trade finance transactions, and specific guidance on recommended industry certifications for trade finance activities to qualify as green. Guided by this framework, HSBC and UOB have piloted four green trade finance transactions for renewable energy, recycling, agriculture and farming activities, to support businesses in greening their supply chains.
White paper on fostering green finance solutions
The white paper outlines recommendations and lays out a roadmap to scale green finance in the real estate, infrastructure, fund management and transition sectors. These include a green securitisation platform to scale sustainable infrastructure investments in the region, and recommendations for the use of transition bonds and loans in the shipping, oil and gas and automotive sectors to support more sustainable practices. In its next phase of work, GFIT will partner industry associations, financial institutions and businesses to develop and implement the recommended proposals.
Green finance workshops
The GFIT has launched a series of workshops and e-learning modules running from May 2021 to April 2022 for financial institutions and corporates. These programmes aim to strengthen the capabilities of banks, insurers and asset managers in environmental risk management, enhance their environment-related disclosures, deepen knowledge of green finance instruments, and enable financial institutions and corporates to customise green financing solutions for transition sectors.
