Published : 9 June 2022
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
A most promising area of growth is sustainable finance where singapore aspire to support Asia’s transition to a low carbon economy.
- The task of reducing emissions is urgent, as pointed out by the most recent report of the United Nations Intergovernmental Panel on Climate Change.
- All sectors of the economy need to achieve progressive and deep emission reductions.
- Some US$2 trillion in infrastructure investments will be needed over the next decade to enable Southeast Asia’s transition towards sustainability
Bain & Company, Microsoft and Temasek, Southeast Asia’s Green Economy: Opportunities on the Road to Net Zero, 2021..
Developing strategies to build a comprehensive ecosystem for green and transition financing.
- Aligning financing efforts with credible sectoral transition plans, that provide clarity about transition pathways and carbon emission targets. This in turn generates investor confidence and catalyses greater sustainable finance flows.
- Promoting blended finance solutions, where targeted risk sharing by governments or multilateral development banks can crowd in private capital more effectively.
- Stepping up efforts to enhance collection of emissions data, develop credible transition taxonomies, and implement consistent climate-related reporting and disclosure standards.
- One key initiative which MAS has embarked on with the industry is Project Greenprint, which comprises common utility platforms.
- These platforms will harness technology to address the financial sector’s sustainability data needs, and enable a more transparent, trusted and efficient ESG ecosystem that can catalyse green and sustainable finance.
One of the most encouraging aspects of the strong growth of the financial sector is the number of good jobs that are being created.
- MAS estimates that there will be more than 9,400 new hiring opportunities for permanent roles in the financial sector in 2022
MAS-IBF Employment Outlook Survey 2022..
- More than 3,000 jobs will be in technology.
- Software developers and engineers continue to have the highest demand, with more than 700 opportunities.
- They support a wide range of exciting activities, such as designing and developing digital finance services; applying blockchain technology in trade finance; and using artificial intelligence to detect fraud and money laundering.
- There will also be interesting new roles in sustainable finance.
- These range from execution of ESG transactions to advisory services and product development.
- Many of these jobs will draw on traditional finance expertise such as product structuring, risk management, reporting and pricing, but layered and infused with new knowledge on sustainability.
Climate change is a global existential challenge. Singapore, being a low-lying city state, is particularly vulnerable to the effects of climate change.
Singapore is fully committed to the global climate action, and will play its part as a responsible member of the international community.
In 2021, Singapore launched the Singapore Green Plan 2030 (“Green Plan”), a whole- of-nation movement to advance the national agenda on sustainable development. The Green Plan charts concrete targets over the next 10 years, strengthens Singapore’s commitments under the United Nations’ 2030 Sustainable Development Agenda and Paris Agreement, and positions us to achieve our long-term aspiration of net zero emissions.
The green transition will be a new engine for jobs creation and growth across the economy. This includes the greening of traditional sectors such as aviation, energy, and tourism, as well as the emergence of new sectors such as green finance, carbon services and low-carbon technologies. The Government will work in partnership with the private sector to provide an enabling environment for businesses and workers to take advantage of these new growth opportunities.
To support Singapore’s decarbonisation efforts and deepen Singapore’s green finance market, the Government announced at Budget 2022 that the public sector will take the lead by issuing up to S$35 billion of green bonds by 2030. This will include bonds issued by the Government as well as Statutory Boards.
These public sector green bond issuances will serve as reference for the corporate green bond market, deepen market liquidity for green bonds, and attract green issuers, capital, and investors. This paves the way for greater private sector green finance activity.
The Government has published a national Green Bond Framework (“Framework”), which lays the foundation for the issuance of green bonds by the Government under the Significant Infrastructure Government Loan Act 2021 (“SINGA”), and serves as a reference for Statutory Boards’ respective green bond frameworks.
Singapore Sovereign Green Bonds,
also known as Green Singapore Government Securities (“SGS”) (Infrastructure), will be used to finance major, long-term green infrastructure in Singapore that qualify under the Framework. Borrowing for such infrastructure spreads the costs across the generations that would benefit from these projects.
Examples of eligible green SINGA projects include the upcoming Cross Island Line and Jurong Region Line. Our rail network expansion will enhance connectivity and encourage more commuters to take mass public transport, which together with walking and cycling, are the greenest ways to move.
The Singapore Government will borrow prudently and adhere to stringent safeguards.
(a) In order to qualify for financing via Green SGS (Infrastructure), infrastructure projects will need to meet the high bar to qualify as nationally significant under SINGA, as well as the green eligibility criteria stated in the Framework.
(b) The issuance of such green bonds will be subject to the overall legislative gross borrowing limit and the annual effective interest cost limit under SINGA.
The gross borrowing limit of S$90 billion and annual effective interest cost threshold of S$5 billion apply to the overall SINGA programme, which comprises the issuance of both Green SGS (Infrastructure) and SGS (Infrastructure).
Overview of Singapore Government Borrowings Details on how Green SGS (Infrastructure) fits within the Singapore Government’s existing suite of borrowings.
Bonds & Bills – Monetary Authority of Singapore Details on Green SGS (Infrastructure) such as the issuance calendar, auction updates and bond return calculator.
Sustainable finance is the practice of integrating environmental, social and governance (ESG) criteria into financial services to bring about sustainable development outcomes, including mitigating and adapting to the adverse effects of climate change.
Singapore’s financial sector can play a useful role in catalysing sustainable and green finance in the region. MAS is taking active steps to promote sustainable financing in our financial sector, including engaging financial institutions to consider ESG criteria in decision making processes, support the adoption of industry standards and guidelines, encourage industry-led capacity building efforts, develop the green bond market in Singapore and collaborate with local stakeholders and international counterparts to distill best practices.
Estimated green investment needed in ASEAN till 2030
Top asset managers in Singapore are already United Nations Principles for Responsible Investments (“UN PRI”) signatories
Investment organisations expressing support for the Singapore Stewardship Principles (“SSP”)