Singapore Making Leaps In Green Finance
On October 13th, Ravi Menon, managing director of the Monetary Authority of Singapore, had some promising news to share. Menon took (virtual) center stage as the key-note speaker of the Financial Times ‘Investing for Good’ digital conference.
The announcement was the launch of Singapore’s first Green Finance Centre. The initiative- being a collaboration between Singapore Management University (SMU) & Imperial College Business School- aims to synergize SMU’s financial economics strength with Imperial’s climate strong suit.
The center is setting out with the primary aim of conducting research. This will be carried out with an Asian context in mind, providing policymakers and institutions with the information needed to tailor for greener decisions; therefore supporting ‘Asia’s transition to a low carbon future.’
The effects of the center, however, are hoped to span further than research. It is expected to foster a future of green-educated professionals, offering courses spanning across undergraduate to professional education levels. The domino effects of this kind of education can not be underestimated.
The center is coming into existence at a time where necessity is meeting desire. It is no secret that much of the modern world is coming to realize the global imperative of utilizing capital sustainably. A 2019 paper by Morgan Stanley’s Institute for Sustainable Investing held that 90% of millennials who fall into the category of high net worth investors, want their investments to correlate with their personal values.
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Menon’s speech provided the world with a clear roadmap of Singapore’s environmental and climate initiatives- but Singapore is no stranger to the area of Green Finance. In 2019 MAS committed 2 Billion USD to the Green Investments Programme, dedicated solely to public market investment strategies that have a strong green focus.
MAS has placed funds with a select amount of trusted Asset Managers, who have a proven track record of dedication to green finance and sustainable investments.
Mr. Ong Ye Kung, MAS board member & Minister for Education, has been described as a ‘major prong’ of the action plan for the GIP. Following the 2 Billion USD commitment to the GIP, Mr. Ong has also pledged to make green lending a ‘mainstream activity’.
Whilst it is no doubt that Singapore has a track record of green initiatives, perhaps the global pandemic we have all, as an international community been challenged with, has made for a greater sense of resolve amongst officials.
We know one of the major factors that contributed towards oil prices falling below zero (for the first time in history) in April, was of course the Covid-19 pandemic. If there was ever a time to accept our dependency on fossil fuels needs to end, it was then. Climate action groups have been pleading for a greener society, and the elimination of fossil fuels and the pressure upon officials to make green decisions is growing.
“No amount of 3Rs (reduce, reuse and recycle) will ever be enough to avoid the worst of the climate catastrophe if we do not table this elephant in the room.”
Rebecca Loy & Jay Wong, SG Climate Rally
Singapore as a financial hub is well-conditioned to make strides in the direction that is needed in order for green finance plans to flourish. There is an urgency that is becoming more palpable by the day, and it is through strategies like those described above, namely, research, education, and funding for investment, that tangible change can be made.
As Dr. Rhia-Mari has said, “The purpose of the financial markets is to facilitate the movement of capital towards meeting the needs of society”– the need for sustainable finance has never been greater, and Singapore seems to be walking in the right direction.
In the cover picture: Marina Bay, Singapore. Photo Credit: Unsplash.
Editor’s Note: The opinions expressed here by Impakter.com contributors are their own, not those of Impakter.com