International Experiences in Green Finance Development

Green Finance Ecosystem in Singapore 33 4.2 A Clear Positioning and Strategic Plan for the Direction of Future Financial Development In 2019, the Monetary Authority of Singapore (MAS) proposed a Green Finance Action Plan with a clear objective to build Singapore into an Asian and international green financial center. In April 2023, based on the original plan, the Net-zero Financial Action Plan was further proposed with the shift from “green” to “net-zero”, including transition finance, promoting climate information disclosure, and building a financial industry adapted to climate change. The plan aims to establish a credible transformation plan, propose transformation solutions, and develop the market. 4.3 Strong Financial Support The Singapore government also provides strong financial support. In 2017, the MAS launched a sustainable bond funding plan, providing a subsidy of no less than 100,000 Singapore dollars (SGD) for external review. In 2018, it launched an insurance-related margin funding program to provide SGD 2 million funding for bond risks. In 2019, it launched a US$2 billion green investment plan that rewards fund managers for green projects while, in 2023, the Singapore government aimed to build a climate-resilient investment portfolio. It introduced a new “Too Little, Too Late” climate scenario to better gauge the long-term impact on portfolio returns, initiated allocation to 2 climate indices in an equity portfolio under the Climate Transition Program, and integrated ESG considerations into the evaluation process of External Fund Managers. In November 2020, the world’s first green and sustainable loan funding plan was launched, with a period of more than 3 years and no less than SGD 20 million for green and sustainable loans. Relevant loans can receive a subsidy of SGD 100, 000. In April 2023, the subsidy was extended further, with a sustainable bonds and loan subsidy of SGD 15 million, and was extended for another 5 years to 2028, while the insurance-related security deposit subsidy was extended to 2025. 4.4 Being at the Forefront of Adopting International Standards In terms of industry standards and taxonomy, the Singapore government aims to put the city- state at the forefront of adopting international standards. It has facilitated multiple rounds of hearings, industry-wide consultations, domestic and foreign communications, and transparent procedures. In addition, it tries to align with the regional requirements and in compliance with international standards such as the Singapore-Asia Taxonomy. The MAS established the Green Finance Industry Working Group (GFIT) including players of industries, academia and non-governmental organizations, which is different from the intergovernmental coordination of the Hong Kong Cross-Agency Steering Group (CASG). In 2021, the Working Group conducted the first round of hearings on the green taxonomy and offered the first round of proposals. In 2022, the second round of hearings was held to discuss the energy, transportation, and real estate industries. The following year, the third round of