Next steps to finance a green economy

OPPORTUNITIES to grow the financial sector as well as to respond to climate concerns are being boosted. Recent announcements made by the Monetary Authority of Singapore (MAS) at the Singapore FinTech Festival can help create green finance that is especially tailored to fund projects that drive towards sustainability. They signal Singapore's aim to be a leading regional centre in this growing niche.

Under the Green Investments Programme (GIP), the MAS will channel US$2 billion to public market investment strategies that show a strong green focus. As part of the GIP, the MAS will also earmark US$100 million to the Green Bond Fund by the Bank for International Settlements - dubbed the central bank for the world's central banks.

These figures are sizeable but not large in comparison to overall investment sums - the market just for local currency bonds in the first half of 2019 was some S$420 billion. But this new green mandate can be critical to jumpstart the demand for green investments. As noted in a 2017 report on green finance led by the Singapore Institute of International Affairs, government moves to earmark funds for green and sustainable investments are a necessary step.