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Singapore central bank to invest US$2 billion in green assets via select managers

MAS says the selected asset managers will “designate Singapore as their sustainability hub in the Asia Pacific”
By Goh Thean Eu   
March 11, 2021

Singapore’s central bank plans to channel US$2 billion of its funds into green and sustainable assets through a select group of money management firms as part of efforts to attract green funds and asset managers with a sustainability focus to the city state.

The Monetary Authority of Singapore (MAS) will “soon” place the funds with managers that “are committed to deepen green finance activities out of Singapore”, according to Managing Director Ravi Menon.

“Through a highly competitive process, we have now identified a select group of asset managers with strong green focus,” he said in his keynote address at a virtual investment conference in Singapore on March 9.

He did not identify the managers, saying only that they have “good track record of sustainability investing, robust stewardship policies, and a strong understanding of how to deliver a portfolio that has a deep environmental footprint while still delivering good returns”.

He said the managers will designate Singapore as their Asia Pacific sustainability hub. He said their Singapore offices will lead Asia-focused sustainability research, and spearhead environmental, social and governance (ESG) engagements in the region.

“These asset managers will be valuable partners to MAS and the investor community in the sustainability journey,” he added.

Menon noted that total ESG assets in Asia Pacific more than doubled to around $42 billion last year from about $20 billion in 2019. “Of the record of $30 billion global inflows into ESG funds last year, Asia attracted about $22 billion,” he said.

Last June, MAS released consultation papers proposing a set of environmental risk management guidelines for financial institutions. The proposals include requiring asset managers to develop risk management tools and metrics such as scenario analysis and stress testing, and disclosures on risk management and the impact of material environmental risk.