Singapore and China advance collaboration in green and transition finance
25 June 2024
On 21 May 2024, the Monetary Authority of Singapore (“MAS”) announced that it had discussed initiatives to advance cooperation in green and transition finance with the People’s Bank of China (“PBC”) at the second China-Singapore Green Finance Taskforce (“Taskforce”) 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 Taskforce was established 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. For more on the establishment of the Taskforce, please see our article “Singapore and China seek to strengthen collaboration in green and transition finance and financial connectivity”.
The meeting focused on the joint initiatives under each workstream and discussed the following:
- Taxonomies and definitions: The mapping of the Singapore Asia Taxonomy (“SAT”) to the International Platform on Sustainable Finance’s Common Ground Taxonomy (“CGT”) will be completed by the end of 2024. This will facilitate 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.
- Technology: Metaverse Green Exchange and Beijing Green Exchange are developing a carbon accounting and decarbonisation rating platform which will 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.
Aside from the above, MAS and PBC 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) and Project NovA! to facilitate the collecting, accessing and harnessing of high-quality ESG data to drive green and transition efforts.
Reference materials
The press release is available on the MAS website www.mas.gov.sg.