The Monetary Authority of Singapore (MAS) and the People’s Bank of China (PBC) discussed initiatives to advance cooperation in green and transition finance between China and Singapore at the 2nd China-Singapore Green Finance Taskforce (GFTF) meeting held on 20 May 2024. The initiatives discussed covered the alignment of taxonomies, facilitation of green finance flows, and the development of a decarbonisation rating platform.
The GFTF was set up in 2023, with three workstreams led by private and public sector players which focus on initiatives to scale up green and transition financing flows between Singapore, China and the region.
The 2nd GFTF meeting progressed on the joint initiatives under each workstream and discussed the following:
- Taxonomies and Definitions: MAS and PBC will complete the mapping of the Singapore Asia Taxonomy (SAT) to the International Platform on Sustainable Finance (IPSF)’s Common Ground Taxonomy (CGT) [1] by the end of this year. This will facilitate the cross-border issuance by Singapore and Chinese corporates of CGT-aligned green financing bonds and loans originated by Singapore and Chinese financial institutions. MAS and PBC also conducted an industry capacity building session on transition taxonomies to deepen understanding of transition activities as defined by China and Singapore respectively.
- Products and Instruments: Singapore Exchange and China International Capital Corporation are collaborating on a Green Corridor to facilitate green financing flows between Singapore and China. As a start, the workstream will focus on encouraging green panda bond issuances, given the demand from Singapore issuers to raise capital in the Chinese onshore bond market. MAS will provide support to encourage such financing flows through grant schemes such as the Sustainable Bond Grant Scheme.
CapitaLand Investment, a real asset investment management group in Asia, was the first Singapore-based company to issue a 3-year sustainability-linked panda bond of RMB 1 billion under the Green Corridor. MAS and PBC expect this landmark issue to catalyse more of such financing flows under this workstream. - Technology: Metaverse Green Exchange and Beijing Green Exchange are developing a carbon accounting and decarbonisation rating platform. The platform will, amongst other things, aggregate Chinese corporates’ carbon emissions data to support Singapore and Chinese financial institutions in structuring green financing solutions for these corporates. The workstream will also study the feasibility of aligning the decarbonisation rating methodology with the CGT and SAT.
The meeting also discussed emerging areas of interests, including nature and biodiversity, ESG data model interoperability, and the use of artificial intelligence and data analytics through Greenprint (Gprnt) [2] and Project NovA! [3] to facilitate the collecting, accessing and harnessing of high-quality ESG data to drive green and transition efforts.
Ms Gillian Tan, MAS’ Assistant Managing Director (Development and International) and Chief Sustainability Officer, who co-chairs the GFTF with Dr Ma Jun, Chair of the China Green Finance Committee, said at the meeting, “The GFTF is a key platform for China and Singapore to jointly develop concrete and meaningful initiatives to advance green finance cooperation. The wide range of deliverables announced today is testament to the strong collaboration between MAS, PBC and industry partners from both countries and our shared ambition to mobilise the financing required for an effective transition to net zero in the region.”
[1] The IPSF’s Common Ground Taxonomy, first published in November 2021 and updated in June 2022, provides an in-depth comparison that puts forward areas of commonality and differences between the EU’s and China’s green taxonomies.
[2] Greenprint (Gprnt) is an open and interoperable data platform launched in November 2023 that interlinks the financial sector and real economy to facilitate efficiencies in collecting, accessing and harnessing high-quality ESG data to drive green and transition efforts. It aims to (i) Automate ESG disclosures for businesses large and small, through integration with various public and private data sources, and translate these economic data into ESG-related data outputs; (ii) Facilitate access to aggregated ESG data, benchmarks and insights from its ecosystem of private and public data; and (iii) Connect ESG market solutions to investors, financial institutions, and corporates.
[3] Project NovA! is an AI technical platform under the Singapore’s National AI Programme in Finance, which aimed to generate insights on companies’ environmental impact and identify emerging environmental risks.