MAS, People’s Bank of China further collaboration in green and transition finance

The Monetary Authority of Singapore (MAS) and the People’s Bank of China (PBC) discussed initiatives to advance cooperation in green and transition finance between China and Singapore at the 2nd China-Singapore Green Finance Taskforce (GFTF) meeting on May 20.

The initiatives discussed in Beijing covered the alignment of taxonomies, facilitation of green finance flows and the development of a decarbonisation rating platform, according to MAS.

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

On the taxonomies and definitions workstream, MAS and PBC will complete the mapping of the Singapore Asia Taxonomy (SAT) to the International Platform on Sustainable Finance (IPSF)’s Common Ground Taxonomy (CGT) by the end of this year.

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, says MAS.

The IPSF’s CGT, first published in November 2021 and updated in June 2022, provides an in-depth comparison that puts forward areas of commonality and differences between the EU’s and China’s green taxonomies.

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Next, on the products and instruments workstream, the Singapore Exchange S68 and China International Capital Corporation are collaborating on a “green corridor” to facilitate green financing flows between the two countries.

As a start, 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. MAS will provide support to encourage such financing flows through grant schemes such as the Sustainable Bond Grant Scheme.

CapitaLand Investment (CLI) was the first Singapore-based company to issue a three-year sustainability-linked panda bond of RMB1 billion ($190 million) under the green corridor. CLI announced in March that the subscription rate was 1.65 times.

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Finally, on the technology workstream, Metaverse Green Exchange (MVGX) and Beijing Green Exchange are developing a carbon accounting and decarbonisation rating platform.

The platform will aggregate Chinese corporates’ carbon emissions data to support Singapore and Chinese financial institutions in structuring green financing solutions for these corporates.

Looking ahead, the workstream will also study the feasibility of aligning the decarbonisation rating methodology with the CGT and SAT.

The meeting also discussed emerging areas of interest, including nature and biodiversity, ESG data model interoperability, and the use of artificial intelligence and data analytics through Greenprint (Gprnt) and Project NovA! to facilitate the collecting, accessing and harnessing of high-quality ESG data to drive green and transition efforts.

Gillian Tan, MAS’s assistant managing director (development and international) and chief sustainability officer, said 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 a testament to the strong collaboration between MAS, PBC and industry partners from both countries and our shared ambition to mobilize the financing required for an effective transition to net zero in the region,” added Tan, who co -chairs the GFTF with Ma Jun, chair of the China Green Finance Committee.