A financial industry taskforce convened by the Monetary Authority of Singapore (MAS) launched several initiatives to accelerate green finance in Singapore through improving disclosures and fostering green solutions.
The Green Finance Industry Taskforce (GFIT) issued a detailed implementation guide for climate-related disclosures by financial institutions; a framework to help banks assess eligible green trade finance transactions; and a whitepaper on scaling green finance in the real estate, infrastructure, fund management and transition sectors. GFIT will also launch for financial institutions (FIs) and corporates a series of workshops to build capacity in green finance, with support from its industry association partners.
The guide on implementing climate-related disclosures sets out best practices that are aligned with the recommendations of the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD) . The guide also outlines specific disclosure practices for each of the banking, insurance and asset management sectors, taking into consideration the different approaches that individual sectors could take. The guide will help to enhance the quality of FIs’ climate disclosures, and facilitate more consistent and comparable disclosures across FIs.
The framework for green trade finance and working capital provides a principles-based approach for banks to assess eligible green trade finance transactions, and specific guidance on recommended industry certifications for trade finance activities to qualify as green. Guided by this framework, HSBC and UOB have piloted four green trade finance transactions for renewable energy, recycling, agriculture and farming activities, to support businesses in greening their supply chains.
GFIT has also published a whitepaper outlining recommendations and laying out a roadmap to scale green finance in the real estate, infrastructure, fund management and transition sectors. These include a green securitisation platform to scale sustainable infrastructure investments in the region, and recommendations for the use of transition bonds and loans in the shipping, oil and gas and automotive sectors to support more sustainable practices. In its next phase of work, GFIT will partner industry associations, financial institutions and businesses to develop and implement the recommended proposals.
GFIT will launch a series of workshops and e-learning modules from May 2021 to April 2022 for FIs and corporates. These programmes aim to strengthen the capabilities of banks, insurers and asset managers in environmental risk management, enhance their environment-related disclosures, deepen knowledge of green finance instruments, and enable FIs and corporates to customise green financing solutions for transition sectors.
Ms Gillian Tan, Assistant Managing Director (Development and International), MAS, said, “GFIT’s initiatives to enhance climate-related disclosures and strengthen green capabilities will enable financial institutions to effectively develop green solutions and align their portfolios towards facilitating Asia’s transition to a low carbon economy. These initiatives will also contribute to global efforts to achieve greater consistency and comparability in climate-related disclosures, as well as provide investors and market participants with the necessary information for climate risk analysis and investment decision-making.”