Parliament Q&A

Written reply by Masagos Zulkifli, Minister for the Environment and Water Resources, to Parliamentary Question on Sustainable Financing on 6 May 2019

TOPICS: Sustainability

Question by Mr Desmond Choo: To ask the Minister for the Environment and Water Resources how can the Ministry work with our financial institutions and funding bodies to divert more support for environmentally sustainable projects while reducing exposure to those with adverse impact on the environment.

Answer by Minister:

MEWR recognises that our financial sector plays a key role in advancing our environmental objectives. We work closely with the Monetary Authority of Singapore (MAS) to promote green financing in Singapore and to increase the financial sector’s awareness of environmental risks and opportunities.

2 The Government has taken a pragmatic approach through the adoption of international standards, market-led best practices and capability-building in the development of green financing in Singapore.  There has been progress on various fronts.

i. In 2015, the Association of Banks in Singapore (ABS) issued the Guidelines on Responsible Financing. Our local banks have all adopted these guidelines to evaluate their borrowers’ Environmental, Social and Governance (ESG) risks and help borrowers improve their sustainability profiles. Most recently, in April 2019, the local banks announced their decision to cease the financing of new coal-fired power plants.

ii. The Singapore Exchange (SGX) introduced the “Comply or Explain” Sustainability Reporting Guide for listed companies, beginning from the financial year ending on or after 31 December 2017. The inaugural sustainability reports by first-time reporting companies have progressively been published.

iii. To encourage the issuance of green bonds, MAS introduced a Green Bond Grant Scheme in 2017, which helps to defray the cost of certifying sustainability oriented bonds as green bonds. This Scheme leverages international green bond standards to promote convergence and harmonisation with regional and international markets. Over $4 billion of green bonds have been issued to date.

3 The Government also supports capability-building initiatives as they are key to companies understanding and incorporating ESG risks and opportunities across their core businesses. For example, MAS is working with insurers to anchor ESG research, modelling capabilities and underwriting teams in Singapore to catalyse the development of innovative ESG products.

4 These are encouraging developments. MEWR will continue to work with MAS to support our green financing efforts and steer the broader conversation on sustainable development. This will guide efforts in priority areas such as climate mitigation and adaptation and resource efficiency, as we transition to a resource-efficient and low-carbon future.

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