The Green Finance Industry Taskforce, convened by the Monetary Authority of Singapore (MAS), has released a consultation paper on proposed taxonomy for financial institutions to identify activities that can be considered environmentally friendly, in the push to turn the city state into Asia’s leading green finance hub.
The taskforce has also launched a handbook to guide asset managers, banks and insurers on implementing environmental risk management.
“Compared to other taxonomies, a key feature of the proposed taxonomy is that it encompasses transition activities that allow for a progressive shift towards greater sustainability while taking into account starting positions and supporting inclusive economic and social development,” the MAS says in a statement on January 28.
According to MAS Managing Director Ravi Menon, the goal is to turn Singapore into the “leading green finance hub in Asia”.
The taxonomy is one of the Green Finance Industry Taskforce’s four key initiatives to accelerate development of green finance in the city state. The other three are to enhance financial institutions’ environmental risk management practices, improve disclosures, and foster green finance solutions.
The taskforce comprises representatives from financial institutions and industry groups, companies, and non-governmental organisations. It’s chaired by Tony Cripps, chief executive officer of HSBC Singapore.
“With MAS setting the expectations for sound environmental risk management and the industry coming together with practical solutions on how to meet these expectations, we will develop a more climate-resilient and environment-friendly financial system,” Menon says in the statement.
Public consultations on the taxonomy proposal ends on March 11.