Industry Taskforce Consults on Second Version of Green and Transition Taxonomy
Singapore, 12 May 2022… The Green Finance Industry Taskforce (GFIT)1, convened by the Monetary Authority of Singapore, today published for public consultation detailed thresholds and criteria for economic activities in the energy, transport, and real estate sectors. This builds on GFIT’s earlier proposed taxonomy in January 20212. It also incorporates a user guide for financial institutions and companies to apply the taxonomy.
2. The three sectors covered under this second version are part of the eight focus sectors3 that collectively account for close to 90% of ASEAN greenhouse gas emissions. The proposed thresholds and criteria can be used to classify an economic activity as green, amber, or red, using a traffic light system, to differentiate its contribution to climate change mitigation.
- A green classification represents activities that contribute substantially to climate change mitigation by operating at net zero, or are on a pathway to net zero by 2050.
- An amber classification represents transition, and includes activities that are either transitioning towards green within a certain time frame, or facilitating significant emissions reductions in the short term.
- A red classification refers to harmful activities that are not currently compatible with a net zero trajectory.
3. The user guide which accompanies the taxonomy includes detailed guidance on the reporting of a company’s revenue, capital expenditures and operating expenditures that are aligned with the taxonomy criteria. GFIT aims to release the criteria and thresholds for the remaining five sectors for public consultation in late 2022, and finalise the full taxonomy in 2023.
 GFIT is an industry-led initiative comprising representatives from financial institutions, corporates, non-governmental organisations, and financial industry associations. Its mandate is to help accelerate the development of green finance through four key initiatives: (i) develop a taxonomy, (ii) enhance environmental risk management practices of financial institutions, (iii) improve disclosures, and (iv) foster green finance solutions.
 The eight focus sectors are: Agriculture and Forestry/Land Use, Real Estate, Transportation, Energy, Industrial, Information and Communications Technology, Waste/Circular Economy, Carbon Capture and Sequestration.