Singapore rolls out the green carpet to become sustainable financing hub
MAS announces a US$2 billion green investments programme; The Asset's Singapore event focuses on green financing
Singapore’s regulator is enacting proactive moves to support the city state in promoting environmentally sustainable projects and mitigating climate change risks in Singapore and the region.
The Monetary Authority of Singapore (MAS) announced during the Singapore Fintech Festival that it has established a US$2 billion green investments programme (GIP) to invest in public market investment strategies with a strong green focus.
Through its support, the MAS has managed in a few short years to place Singapore at the heart of financial technology innovation in the region. Fintech startups have flocked to the Lion City and the over 50,000 attendees at the latest edition of the fintech festival, which runs until November 16, are testament to that.
As the Southeast Asian financial hub lays out its case to be the regional centre for ESG and Sustainability related financing, who wouldn’t bet against Singapore now becoming the green financing centre for Asia?
With echoes of the early days of its fintech adoption push, MAS’ GIP initiative will aim to nurture and inspire the growth of a robust and diverse ecosystem of green financing capabilities in Singapore.
To instigate this, MAS will place funds with asset managers who are committed to drive regional green efforts out of Singapore and contribute to MAS’ other green finance initiatives including developing green markets and managing environmental risks.
Selected managers will be those who have demonstrated a firm commitment to deepening their green investment capabilities across functions such as research, stewardship, policy and portfolio management, accelerate local capability transfers, and increase the management of green-focused funds in Singapore.
The financial overseer will also scout for managers who can demonstrate their capabilities in incorporating environmental considerations into their investment process and actively directing capital towards investments that have a better green profile.
MAS’ first investment under the GIP will be a US$100 million placement in the Bank for International Settlements (BIS) Green Bond Investment Pool (GBIP). Together with other participating central banks, MAS hopes that this initiative will help accelerate further deepening of the green bond market.
Green financing was also the key theme at the most recent Asset event in Singapore. At the Asset’s 14th Asia Bond Markets Summit, delegates were eager to learn about the latest trends in debt capital markets and how sustainable finance is possible against the backdrop of the US-China trade war, global slowdown and increased volatility shrouding the investment outlook.
Influential figures from the industry such as David Jenkins, head of sustainable finance, corporate & institutional banking, National Australia Bank; Jeff Zhang, global head of debt capital markets, CTBC Bank; and Siong Ooi, managing director, co-head of debt capital markets - loans & bonds, Asian investment banking division, MUFG; elucidated on how financing strategies are now evolving to meet sustainability objectives.
While Cedric Rimaud, Asean programme manager, Climate Bonds Initiative, and Nicholas Gandolfo, associate director, sustainable finance solutions Asia-Pacific, Sustainalytics, spoke of the opportunities for banks and issuers to take leadership and demonstrate commitment to countering climate change by integrating ESG and sustainability in investment.
Meanwhile Jonathan Drew, managing director, sustainable finance in real assets and structured finance group of HSBC, emphasized the important role of environmental, social, and governance (ESG) data in determining the sustainability risks of corporate investment portfolios.
According to Drew, there is a massive need for data and data processing for earth modeling in managing those impacts due to climate changes.
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