The Monetary Authority of Singapore (MAS) published its sustainability report for 2021-2022, a circular on disclosure and reporting guidelines for retail environmental, social and governance (ESG) funds, and announced the issuance of Singapore’s inaugural sovereign green bond, Green Singapore Government Securities (Infrastructure)—also known as “Green SGS (Infra).” Additionally, MAS, in collaboration with Google Cloud, launched the Point Carbon Zero Program to drive the innovation, incubation, and scaling of climate fintech solutions in Asia.
The key highlights of the aforementioned updates follow:
- The sustainability report sets out MAS’ strategy on climate resilience and environmental sustainability to strengthen the resilience of financial sector to environmental risks, develop a vibrant green finance ecosystem, build a climate-resilient reserves portfolio, and incorporate sustainable practices within the organization. This year, MAS has aligned the reporting of its sustainability efforts with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations including four core pillars of governance, strategy, risk management, and metrics and targets. MAS aims to reduce emissions sizably and achieve net-zero emissions at the earliest possible timeframe for physical operations. The report has set financial year (FY) 2025 and FY 2030 targets for MAS’ Scope 1, Scope 2, and Scope 3 (business air travel and outsourced currency operations) emissions and new metrics for the reserves portfolio, implementing portfolio actions that are expected to reduce the Weighted Average Carbon Intensity (WACI) for equities investments by up to 50% by FY 2030. The WACI metric for corporate bonds will be reported for the first time in 2022.
- The circular on retail ESG funds sets out MAS’ expectations on how existing requirements under the Code on Collective Investment Schemes and the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations apply to retail ESG funds as well as the disclosure and reporting guidelines applicable to ESG funds. The guidelines aims to facilitate greater comparability in the disclosures made by retail ESG funds, which will in turn allow investors to make more informed investment decisions. This circular will come in effect from January 01, 2023 and is applicable to an authorized or recognized scheme (ESG Fund) that uses or includes ESG factors as its key investment focus and strategy, and represents itself as an ESG-focused scheme. The guidelines in this circular will apply to prospectuses of ESG Funds that are lodged with MAS on or after the effective date.
- The Singapore’s first sovereign green bond Green SGS (Infra) will be launched via a book-building process within the week and will be denominated in SGD with a tenor of either 30 or 50 years, at a minimum issuance size of about SGD 1.5 billion. The Green SGS (Infra) will be issued under the Singapore Green Bond Framework, which details the Government’s intended use of green bond proceeds, the governance structure to select eligible projects, the operational approach to manage green bond proceeds, and the commitment to annual allocation and impact reporting. Proceeds from the inaugural Green SGS (Infra) will be used to finance expenditures in support of the Singapore Green Plan 2030, including the Jurong Region Line and the Cross Island Line.
- The newly launched Point Carbon Zero Program, which is a collaboration under the MAS’ Project Greenprint, seeks to use climate fintech solutions to bolster financial sector access to accurate and granular climate-related data, for more efficient deployment of capital toward green and sustainable projects. The program aims to catalyze the expected growth of climate fintech solutions in Asia over the next three years as well as empower 10,000 multinational corporations and small and medium-size enterprises to set, track, and achieve their sustainability targets. The key features of the program include mentorship and funding, access to data, managing own carbon footprint, and facilitating data-sharing. The platform will enable fintech firms to collaborate with financial institutions to build, host, and scale climate fintech solutions, using the carbon-neutral infrastructure and data management capabilities of Google Cloud.
Keywords: Asia Pacific, Singapore, Banking, Fintech, Regtech, Green Bonds, Sustainability Report, Disclosures, ESG, Climate Change Risk, Reporting, Point Zero Carbon Program, Sustainable Finance, Google Cloud, Project Greenprint, MAS
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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