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Keynote Speech by Ms Indranee Rajah, Minister in the Prime Minister's Office, Second Minister for Finance and National Development, at The 5th German-Singaporean Financial Forum (GSFF) on 29 November 2021, at Conrad Centennial Hotel

29 Nov 2021
Dr Norbert Riedel, German Ambassador to Singapore 

Mr Jens Rübbert, President, Singaporean-German Chamber of Industry and Commerce 

Distinguished Guests

Ladies and gentlemen


I am delighted to be here for the first time at the German-Singaporean Financial Forum. 

Sustainable Financing to Mitigate Climate Change

2. The COVID-19 pandemic has occupied the attention of governments worldwide over the past 18 months. While the world economy continues to recover from the pandemic, it is important to ensure that we continue to plan ahead. 

3. This year’s theme on implementing the global environmental, social and governance (ESG) agenda is extremely relevant as we chart the path to emerge stronger and build back better from the pandemic, and to mitigate climate change. 

a. At the recent COP-26 meetings, global leaders highlighted the importance of mobilising finance to keep net zero emissions within reach. However, it would be insufficient to rely on public funding alone given that COVID-19 has strained fiscal resources worldwide. 

b. Sustainable financing will therefore play a key role in crowding in private capital to facilitate the orderly transition of economies towards renewables and low emissions sectors.

Supporting the Transition to a Low-Carbon Future

4. Both Germany and Singapore are strong supporters of global climate action and have developed plans to support the transition to a low-carbon future. 

a. Germany has set out clear targets to reduce its greenhouse gas emissions and launched a longer-term strategy to achieve carbon neutrality by 2050.   

b. Singapore has similarly underscored our commitment to sustainability through the Singapore Green Plan 2030, which articulates our concrete near-term plans for sustainable development. Singapore was the first South-east Asian nation to introduce a carbon tax in 2019, at $5 per tonne. We are also reviewing the level and trajectory of our carbon tax. As Finance Minister Lawrence Wong previously indicated, we will announce the revised carbon tax rate for 2024 at next year’s Budget. 

5. As an international financial centre, Singapore can catalyse the flow of capital towards sustainable development in Asia. 

a. We are ASEAN’s largest green finance market, accounting for close to 50% of cumulative ASEAN green bond and loan issuances.

b. Between 2017 and 2020, over SGD 22.5 billion worth of green and sustainability-linked loans have been issued in Singapore. These loans cover a broad range of sectors, such as agriculture, commodities, energy, and financial services.

6. The Government is also leading the way to promote sustainable financing by issuing our own sovereign green bonds and laying the framework and rules. 

a. We will issue green bonds on selected public infrastructure projects and have identified up to $19 billion worth of public sector green projects for this. For example, the National Environment Agency issued its first green bond in September this year. 

b. At the Ministry of Finance, we have set up the Green Bonds Programme Office, to develop a national green bond framework, assist Statutory Boards with the development of their own green bond programmes, engage the industry and manage investor relations.

Enablers to Mitigate the Risk of Greenwashing 

7. Sustainable financing has its challenges, but we can mitigate them. For instance, one challenge is greenwashing – which can reduce the ability of sustainable financing in mobilising private capital. To mitigate this risk, Singapore has been working with industry and international partners to put in place key enablers for credible disclosures.  

8. First, we are harnessing technology to enhance access to trusted high-quality climate-related data. Technologies like Application Programming Interfaces, Internet of Things devices and blockchain can speed up data acquisition and allow for greater transparency in the verification and reporting of data.

a. Under the Project GreenPrint initiative, the Monetary Authority of Singapore (MAS) is partnering the industry to develop interoperable platforms that will support the data needs of the green finance ecosystem. These platforms will aggregate data across multiple systems and enable sharing of data in a secured manner. 

9. Second, we are promoting high quality sustainability reporting and disclosures by companies, so that investors and market participants have data that is consistent, comparable and reliable.

a. MAS and the Singapore Exchange are setting out roadmaps for mandatory climate-related financial disclosures by financial institutions and listed entities. 

b. MAS will also set out early next year its regulatory expectations on the disclosure standards for retail funds with an ESG investment objective.

10. Third, Singapore is contributing to the development of globally interoperable taxonomies to improve sustainability disclosures. 

a. The Green Finance Industry Taskforce, convened by the MAS, is developing the green and transition taxonomy for Singapore-based financial institutions.  European Financial Institutions such as Deutsche Bank and Allianz have contributed actively to this taskforce.

b. Regionally, we are working with our counterparts to develop the ASEAN Taxonomy for Sustainable Finance, which will cater to the different economic contexts of ASEAN members and facilitate more transition financing flows in the region.

c. Both Germany and Singapore have also been working towards finding common languages to facilitate cross-border sustainable financing flows. For example, at the EU-led International Platform on Sustainable Finance (IPSF), we are working together with international partners to develop a “common ground taxonomy”, which will support global efforts to improve sustainability disclosures. 

Enhancing our Partnership in Sustainable Finance

11. The growth in sustainable financing presents numerous opportunities for partnerships between Germany and Singapore. 

12. With businesses in Asia increasingly tapping on green financing to meet their sustainability commitments, there is great potential to bring practical green solutions tailored for Asia’s needs to the market. 

a. MAS is supporting companies globally, to invest in green and transition projects, equipment, and move to more sustainable business models, through its sustainable loan and bond grant schemes. 

b. I encourage German financial institutions and companies to tap on these grants and incentives to develop sustainable solutions for Asia. 

13. Another area of collaboration is in FinTech, which provide solutions in financing the transitions towards low-carbon economies. Companies can co-create novel technologies and solutions to spur green finance adoption in Asia and beyond.

14. We can also work together to deepen Asia-focused sustainable finance expertise, which will help financial institutions understand first-hand the opportunities in the region. 

a. Earlier this year, Deustche Bank established its ESG Centre of Excellence in Singapore. Vigeo Eiris, as part of Moody’s Corporation, has also opened an office here.

b. We have anchored green finance centres of excellence in Singapore. These centres will conduct Asia-centric green finance research and groom a pipeline of talent across the career spectrum. 

c. We welcome German financial institutions to anchor their sustainable finance expertise and build capabilities for Asia in Singapore. 

Conclusion 

15. In closing, sustainable financing plays an important role to accelerate our transformation to a low-carbon future. I encourage more partnerships between Singapore and Germany, to enhance the growth of sustainable finance, generate new opportunities, and mitigate climate change. 

16. Thank you all very much, and I wish you a fruitful discussion ahead.