1. Good morning. I am happy to
join all of you at today’s conference.
Climate Change and Sustainable Development
2. Singapore has always designed
our policies with sustainability in mind. Our founding leaders ensured that
economic growth did not come at the expense of our environment. We have switched
to natural gas which is cleaner, to generate most of our electricity; our city
is immersed in greenery, which was by design; and we are strengthening the resilience
of our water supply. All these means that we have built a solid foundation to
continue being a sustainable city.
3. One of the greatest
challenge that every nation has to meet is the threat of climate change. All
nations have to pursue a green and sustainable growth policy. Singapore is
doing our part in the global fight against climate change. Under our Climate
Action Plan, we are investing in solar energy, developing more sustainable
buildings, and expanding our public transport network so that 8 in 10 homes
will be within walking distance from a train station. From 2019, we will
implement a carbon tax to enhance energy and reduce emissions. But the
Government cannot do this alone. This is why, to galvanise collective action
against climate change, we designated 2018 as the Year of Climate Action and
called on individuals, households and organisations in various sectors to take
action together with us.
Role of Financial Sector
financial sector, with its potential to influence decision-making and support policy
makers, plays a key role in promoting climate action. Let me give three
examples of how this is being done.
Positive moves in sustainable
5. First, there are positive
moves being made in sustainable finance. Banks have been working with companies
to support projects that promote sustainability. For instance, UOB provided
S$15 million financing to Sunseap Group for a series of solar projects in
Singapore. OCBC announced in March this year that its newly set up “#OCBCCares
Fund” will fund six ground-up proposals that address environmental
sustainability issues in Singapore.
6. Regional and global asset
owners are increasingly requiring asset managers to have strong Environmental,
Social and Governance (ESG) credentials, and Singapore’s asset management
industry has been stepping up efforts in this area. Since March 2017, the
Investment Management Association of Singapore (IMAS) has collaborated with the
World Wildlife Fund (WWF) to build industry capacity, through masterclasses on
ESG and sustainable investing.
7. We are also seeing the
growth of a community of impact-first investors in Singapore. For these
investors, “doing well” is synonymous with “doing good”. Garden Impact
Investments (GII), a Singapore-based company, invests in South East Asian
businesses that create jobs and provide services and products for the poor and
marginalised. In addition to the financial returns, each investment is
monitored for their measurable social and environmental impact. I hope to see
such investments gather momentum.
8. On the insurance front,
there is ongoing collaboration between MAS and the industry to build a
sustainable insurance ecosystem. MAS is working with insurers to anchor ESG
research, modelling capabilities and underwriting teams here in Singapore, and
catalyse the development of innovative ESG products such as insurance cover for
energy efficient infrastructure and renewables. MAS is also looking to partner
research institutes such as the Institute of Catastrophe Risk Management and the
Earth Observatory of Singapore to factor long-term climate and environmental
risks into risk models.
9. Singapore will implement
the carbon tax and the first payment will be in 2020. This is not a fiscal
measure to fund government expenditure. The Finance Minister has made a
commitment that the expected revenue of close to S$1 billion in the first five
years will be used to help industries improve energy efficiency and reduce
emissions. This is also an opportunity for the private sector to participate in
co-funding industries’ transformation process.
Leveraging on digital
technologies as key enablers
10. The second way the financial
sector is playing a key role in promoting climate action is by leveraging
digital technologies as key enablers. Let me share two examples of this in
o Using Big Data, ING is working with the Building and Construction
Authority (BCA) and the Singapore Green Building Council (SGBC) to introduce
its Real Estate Finance Sustainability App in Singapore. The App helps commercial
real estate owners move towards a sustainable portfolio by collating data such
as predicted annual savings on cost, CO2 reduction, and cost
recovery time, to generate insights into the profitability of green real estate
o In April this year, DBS participated in the blockchain marketplace
platform demonstration for the transaction of renewable energy certificates
(REC) by Singapore Power Group. This helps corporates achieve their
sustainability goals by ensuring that the electricity they consume comes from
renewable sources, and makes it easier for REC buyers to purchase their green
finance in Singapore and the region
11. The third way the financial
sector is playing a key role in climate action is by mainstreaming sustainable
finance in Singapore and the region. The green financing space presents an
opportunity for Singapore to develop in tandem with regional and global trends.
ASEAN has developed a common set of Green Bond Standards, and we have seen some
success in the use of these Standards. Singapore-based Sindicatum Renewable
Energy Company Pte. Limited issued the first international ASEAN green bond in
January 2018. This was a 2.5 billion Indian Rupee green bond in 5- and 7-year
tranches. The proceeds will be used to finance renewable energy projects in
12. There is scope for the green bond space to grow, and I understand that
the International Finance Corporation under the
World Bank Group will be holding its Green Bond Conference on 7 June. I look
forward to seeing more initiatives that will advance the green bond agenda in
Working with Partners
13. While the initiatives I talked about hold promise, more needs to be done
to develop the long-term sustainable finance agenda. It is thus important to
work with partners who are key to the transition process, for example, regional
development institutions and multilateral organisations like the World Bank
Group, the International Finance Corporation, Asian Development Bank, and the
Asian Infrastructure Investment Bank.
14. NGOs play an important role too. I am pleased that the WWF will be
creating the Asia Sustainable Finance Initiative (ASFI) in Singapore, which is
supported by MAS. ASFI will look to align a diverse base of stakeholders, and
focus on linking sustainable finance activities, with tangible and measurable
real-economy sustainable development outcomes in Singapore and the Asia Pacific
region. Singapore is
happy to host the ASFI as we continue to play a part in being the sustainable
financing hub for the region.
15. Let me conclude. Climate change is an important global issue, which requires
long-term efforts from all sectors. The financial sector can play a key role in
promoting climate action by helping investors realise that there is tangible
value in sustainable development. I urge everyone here to play a part in
advancing the role of sustainable finance.
16. I wish all of you a fruitful Conference.