The Monetary Authority of Singapore (MAS) and the People’s Bank of China (PBC) are taking significant steps to enhance their collaboration in green and transition finance. During the 2nd China-Singapore Green Finance Taskforce (GFTF) meeting on May 20, 2024, the two central banks discussed various initiatives aimed at aligning taxonomies, facilitating green finance flows, and developing a decarbonization rating platform.

The GFTF, established in 2023, focuses on scaling up green and transition financing between Singapore, China, and the broader region. This partnership is crucial as both countries strive to mobilize the financing required for a successful transition to a sustainable, net-zero future.

Key Initiatives from the GFTF Meeting

1. Alignment of Taxonomies and Definitions:
MAS and PBC are working to complete the mapping of the Singapore Asia Taxonomy (SAT) to the International Platform on Sustainable Finance’s Common Ground Taxonomy (CGT) by the end of 2024. This alignment will enable Singaporean and Chinese corporations to issue CGT-aligned green financing bonds and loans, fostering cross-border green finance.

2. Green Financing Products and Instruments:
A collaborative effort between the Singapore Exchange and China International Capital Corporation aims to facilitate green financing flows through a “Green Corridor.” This initiative encourages the issuance of green panda bonds, with CapitaLand Investment being the first Singapore-based company to issue a 3-year sustainability-linked panda bond of RMB 1 billion. MAS supports these efforts through various grant schemes, such as the Sustainable Bond Grant Scheme.

3. Technological Integration for Green Finance:
Metaverse Green Exchange and Beijing Green Exchange are developing a carbon accounting and decarbonization rating platform. This platform will aggregate carbon emissions data from Chinese corporations to help Singaporean and Chinese financial institutions structure green financing solutions. The platform will also explore aligning its decarbonization rating methodology with the CGT and SAT.

4. Emerging Areas of Interest:
The meeting also explored new areas such as nature and biodiversity, ESG data model interoperability, and the use of artificial intelligence and data analytics. Initiatives like Greenprint and Project NovA aim to enhance the collection and utilization of high-quality ESG data, driving forward green and transition efforts.

The initiatives discussed at the 2nd GFTF meeting highlight the strong collaboration between MAS, PBC, and their industry partners. By aligning taxonomies, facilitating green finance flows, and leveraging technology for better carbon accounting, the GFTF aims to mobilize the necessary financing for a sustainable transition. As Gillian Tan, MAS’ Assistant Managing Director and Chief Sustainability Officer, stated, “The GFTF is a key platform for China and Singapore to jointly develop concrete and meaningful initiatives to advance green finance cooperation.“

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This collaboration is a testament to the shared ambition of Singapore and China to lead in the green finance sector, ultimately supporting global efforts to combat climate change and achieve a net-zero future.