MAS commits $2.4 billion to climate-linked investments
Singapore yesterday underlined its resolve to help reduce greenhouse gas emissions, with its central bank committing US$1.8 billion (S$2.4 billion) of the country's official foreign reserves to climate-related investment opportunities.
The Monetary Authority of Singapore also said it was working to safeguard the financial sector against environmental risks and to promote green finance.
"Finance is key to unlocking a sustainable future," said MAS managing director Ravi Menon yesterday.
"It can support the transition to a less carbon-intensive economy and channel capital to green technologies and infrastructure."
As the guardian of Singapore's official foreign reserves, he said, MAS was integrating climate risks and opportunities into its investment framework. That is why it is placing US$1.8 billion with five asset managers to help Singapore build capabilities in green finance.
The announcement came alongside the release of MAS' first sustainability report, which outlines plans to help Singapore make an orderly transition to a low-carbon economy.
This makes MAS the first central bank in Asia, and the second globally after the Bank of England, to publish a standalone sustainability report covering environmental risk and sustainability efforts across all its functions and operations.
Sustainability was one of the key focus areas that will provide future growth opportunities, as highlighted by the Emerging Stronger Taskforce last month.
Mr Menon said the five asset managers will drive regional sustainable efforts by launching new thematic funds around environmental, social and governance concerns.
They will also build capabilities in green finance through training programmes.
The asset managers will generate deeper green finance research customised for the region and explore green fintech solutions, he added.
"Each of them is ramping up their plans to build up their Asia-Pacific hubs in Singapore... We expect they will be able to do so over the next few months."
The five asset managers picked by MAS were not named, in line with its practice.
MAS also seeks to enhance climate-related financial disclosures by companies. It already expects all banks, insurers and asset managers to make climate-related financial disclosures from June next year.
It will consult the industry later this year on how to transition these expectations into legally binding requirements.
The Singapore Exchange will also consult stakeholders on enhancing sustainability reporting guidelines for listed firms.
MAS has also issued guidelines on environmental risk management to all financial institutions.
It will conduct a review later this year on the progress in implementing the guidelines, Mr Menon said.