Monetary Authority of Singapore’s managing director Ravi Menon predicted that «greening» would be as critical as the current technological transformation for the financial sector.
«If climate change is indeed the existential challenge facing mankind, the strategies that we embark on mitigating and managing that process will have huge impact on economies,» Menon said in a «Bloomberg» report. «I think greening the financial system will be as important as the technological transformation of the financial sector.»
As a result of this, Menon urges financial intuitions to brace for the potential changes in asset values and policy caused by climate change as well as be able to seize such business opportunities.
More Incentives, Better Disclosure
«For the last two to three years, we’ve had the green bond scheme which we’ve expanded considerably, and we are now thinking about this in other areas of finance,» Menon said, referring to a green bond grant program launched three years ago to help fund up to S$100,000 ($74,000) in expenses related to bond sales (minimum sales size required is S$200 million or $147 million).
Areas which the regulator highlighted could be in line for promotion include green funds, loans, insurance and risk-transfer solutions.
In addition to promoting growth, Menon also noted the need to improve disclosure on sustainability issues, especially for publicly listed companies which receive reporting guidelines, with current disclosure quality «frankly [varying] widely».
