Not enough of global wealth is being channelled towards sustainable development at the scale and speed necessary to achieve the goals of the Paris Agreement, particularly in Asia, which is where the outcome of the battle against climate change will be determined, he said.
«The transition to a net-zero economy is the greatest collective endeavour humanity must undertake in the decades ahead. How capital is allocated to support this endeavour will be critical to the outcome,» MAS managing director Ravi Menon said in his keynote address at the IMAS-Bloomberg Investment Conference on Tuesday.
«As owners and stewards of capital, you have a great responsibility – to direct investments to activities that promote sustainable development,» he told the audience of investors, thought leaders and technology firms.
More Capital Mobilized
According to Morningstar data, total ESG assets in Asia more than doubled, from about $20 billion in 2019 to about $43 billion in 2020. Of the record $30 billion global inflows into ESG funds last year, Asia attracted about $22 billion.
To have a «purposeful» role as a green finance hub, Singapore will work towards developing green financing solutions customised for Asia; and be the channel through which global capital is directed at meeting Asia’s transition needs, Menon said.
Promoting Sustainability Research
In his speech, Menon announced developments in Singapore's efforts to promote sustainability research tailored to Asia’s needs and the capacity to train a strong pipeline of professionals in green finance.
The first is that credit rating company Moody’s will be building a comprehensive suite of ESG resources out of Singapore to spearhead its sustainable finance agenda in the Asia-Pacific.
This includes an ESG Centre of Excellence for investor outreach, engagement and training; and an ESG-focused Innovation Lab and Technology Accelerator to develop ESG analytical solutions and assessment tools in partnership with local fintech firms.
SIFA Opens Headquarters
The second is the establishment of the Sustainable Finance Institute Asia's (SFIA) headquarters in Singapore, to support the implementation of sustainable finance policy initiatives in Asia.
The institute is partnering the investment community to develop an AI-driven ESG information tool to harness qualitative data at scale to support investment decisions relating to Asian assets. It is already in discussions with several asset managers and financial institutions on a proof of concept, he said.
