A green finance task force convened by the Monetary Authority of Singapore (MAS) has issued a slew of initiatives for financial institutions to enhance climate-related disclosures and green capabilities.
The initiatives include an implementation guide for climate-related disclosures, a framework to help banks assess eligible green trade finance transactions and a white paper on scaling green finance in the real estate, infrastructure, fund management and transition sectors.
The guide will outline specific disclosure practices for each of the banking, insurance and asset management sectors, taking into consideration the different approaches that individual sectors could take.
MAS said the initiatives “will enable financial institutions to effectively develop green solutions and align their portfolios towards facilitating Asia’s transition to a low carbon economy.”
The framework for green trade finance and working capital will highlight how banks can assess eligible green trade finance transactions and it will also include guidance on recommended industry certifications for trade finance activities to qualify as green. Guided by this framework, HSBC and UOB too have piloted four green trade finance transactions for renewable energy, recycling, agriculture and farming activities to support businesses in greening their supply chains.
Additionally, the Green Finance Industry Taskforce (GFIT) will also launch a series of workshops and e-learning modules for financial institutions and corporates. This move will strengthen the capabilities of banks, insurers and asset managers in environmental risk management, deepen knowledge of green finance instruments and enable financial institutions and corporates to customise green financing solutions for transition sectors, MAS said.
Commenting on the initiatives, MAS assistant managing director of development and international Gillian Tan said that it will enable financial institutions to “effectively develop green solutions and align their portfolios towards facilitating Asia’s transition to a low carbon economy.”
Tan added, “These initiatives will also contribute to global efforts to achieve greater consistency and comparability in climate-related disclosures, as well as provide investors and market participants with the necessary information for climate risk analysis and investment decision-making.”
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