ASIA: MAS, China’s central bank plan further collaboration in green finance

The Monetary Authority of Singapore (MAS) and the People’s Bank of China (PBOC) are planning to advance cooperation in green and transition finance between China and Singapore.

The central banks discussed initiatives, including the alignment of taxonomies, facilitation of green finance flows and the development of a decarbonisation rating platform, at the second China-Singapore Green Finance Taskforce (GFTF) meeting held on May 20.

MAS and PBOC will complete the mapping of the Singapore Asia Taxonomy to the Common Ground Taxonomy (CGT) of the International Platform on Sustainable Finance by the end of 2024.

“This will facilitate the cross-border issuance by Singapore and Chinese corporates of CGT-aligned green financing bonds and loans originated by Singapore and Chinese financial institutions,” said MAS on May 21.

The International Platform on Sustainable Finance’s CGT, published in November 2021 and updated in June 2022, provides an in-depth comparison between the European Union’s and China’s green taxonomies.

On the products and instruments front, Singapore Exchange and China International Capital Corp will collaborate on a green corridor to facilitate and catalyse green financing flows between both countries.

The workstream will focus on encouraging green panda bond issuances given the demand from Singapore issuers to raise capital in the Chinese onshore bond market, said MAS.

Singapore’s central bank is planning to support such financing flows through grant schemes such as the sustainable bond grant scheme.

Panda bonds refer to renminbi-denominated debt issued in China’s onshore market by non-Chinese companies, governments and organisations.

Additionally, Metaverse Green Exchange and Beijing Green Exchange are developing a carbon accounting and decarbonisation rating platform.

“The platform will, amongst other things, aggregate Chinese corporates’ carbon emissions data to support Singapore and Chinese financial institutions in structuring green financing solutions for these corporates,” said MAS.

The technology workstream will also study the feasibility of aligning the decarbonisation rating methodology with the CGT and Singapore Asia Taxonomy, MAS noted.

The meeting also discussed emerging areas of interest, including nature and biodiversity, ESG (environmental, social and governance) data model interoperability, and the use of artificial intelligence (AI) and data analytics through Greenprint and Project NovA! to facilitate the retrieval of high-quality ESG data.

Greenprint is an open and interoperable data platform launched in November 2023 that interlinks the financial sector and the real economy, while Project NovA! is an AI technical platform under Singapore’s National AI Programme in Finance.

Ms Gillian Tan, MAS’ assistant managing director (development and international) and chief sustainability officer, said at the meeting: “The GFTF is a key platform for China and Singapore to jointly develop concrete and meaningful initiatives to advance green finance cooperation.

“The wide range of deliverables announced today is testament to the strong collaboration between MAS, PBOC and industry partners from both countries and our shared ambition to mobilise the financing required for an effective transition to net zero in the region.”

The GFTF was set up in 2023, with three workstreams led by private- and public-sector players that focus on initiatives to scale up green and transition financing flows between Singapore, China and the region.