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(Bloomberg) — Singapore is taking multiple steps to improve transition financing, including setting new rules for financial institutions to manage their climate-related risks and to support an orderly transition.
“We do not want financial institutions to indiscriminately exit from carbon intensive activities just to reduce their financed emissions. Rather, we want them to support progressive transition efforts in the economy,” the Monetary Authority of Singapore’s Managing Director Ravi Menon said in remarks at the COP28 summit in Dubai Sunday.
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The city-state’s regulator also launched a new taxonomy Sunday that aims to increase financing to climate-friendly transition activities while minimizing greenwashing risks.
“There is ample private capital in the world — some $400 trillion in assets under management – yet so little of it is going into the net-zero transition effort,” Menon said.
The announcement was one of many made at COP28, which brought together officials from around the world to discuss climate change. Notable announcements at or around the event included a US plan to pledge $3 billion toward a United Nations fund meant to help developing countries with climate-change efforts, and the EU saying it will invest $2.5 billion in the energy transition over two years.
Read more from the COP28 summit here.
Developments outlined by Menon include:
- Singapore-Asia Taxonomy that defines transition activities across eight sectors
- Finalized guide from GFANZ Asia Pacific Network to finance the early retirement of coal-fired power plants
- Transition Credits Coalition to help identify barriers and potential solutions to develop transition credits as a viable market solution
- Blended finance platform with a target fund size of $5 billion; the Singapore government is prepared to contribute concessional capital to support the partnership, Senior Minister Teo Chee Hean said
- MAS has signed a memorandum of understanding with Allied Climate Partners, the International Finance Corporation and Temasek Holdings to establish a green investment partnership
- MAS plans to enter an MOU with ADB and Global Energy Alliance for People and Planet on the Energy Transition Acceleration Partnership
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