Green finance is a key enabler for the transition to a sustainable future but more needs to be done, the managing director of the Monetary Authority of Singapore (MAS), said.
While the volume of assets invested in sustainable projects is rising rapidly and green finance has not been able to reach the scale required, Ravi Menon, said at the «Financial Times Investing for Good Asia Digital Conference» on Wednesday.
The central bank chief highlighted the difficulties of putting together a green-focused bond, and said that data, definition, disclosure must be addressed for green finance to work effectively.
MAS Commitment
To this end, Menon said MAS is working with the financial industry to establish data platforms and cited the recently launched Project Greenprint, a technology platform aimed at promoting a green financial ecosystem by mobilizing capital, monitoring commitment and measuring impact.
MAS' Green Finance Industry Taskforce is currently fleshing out its proposed taxonomy for green and transition activities. «As more jurisdictions develop their own taxonomies, we must ensure they are compatible or inter-operable. Otherwise, cross-border green finance flows will be severely constrained,» he said.
Finally, MAS and SGX are setting out roadmaps for mandatory climate-related financial disclosures by financial institutions and listed entities respectively.
Greening the Financial System
MAS has committed $1.8 billion of its reserves to climate-related investments. These funds will be placed with five asset managers to manage new equity and fixed income mandates focused on climate change and the environment
During the speech, Menon said the National University of Singapore will be establishing the Sustainable and Green Finance Institute (SGFIN) by the end of this year to build a pipeline of talent and leadership in sustainable and green finance. A key research focus of SGFIN is to develop a sustainability and impact measurement and assessment framework.
