Reply to Parliamentary Question on plans to introduce grants to support banks in developing green and sustainability-linked liabilities frameworks
QUESTION NO 1600
NOTICE PAPER 1003 OF 2022
FOR WRITTEN ANSWER
Date: For Parliament Sitting on 28 February 2022
Name and Constituency of Member of Parliament
Mr Don Wee, MP, Chua Chu Kang GRC
To ask the Prime Minister whether MAS has plans to introduce grants that support banks in developing green and sustainability-linked liabilities frameworks so as to take in green deposits to fund banks' green and sustainability related loans.
Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:
1 Businesses accessing green and sustainability-linked financing generally face higher costs compared to conventional financing. MAS therefore provides grants to the businesses to help them defray the additional expenses associated with obtaining an external review on the eligibility of the project being financed, or the monitoring, measurement and reporting of the borrower’s progress in meeting the sustainability metrics.
2 On the other hand, there is comparatively less friction for banks to offer green deposits or similar products. Indeed, some local financial institutions have introduced green and sustainability-linked deposit products given healthy interest from both corporate and retail segments. These include HSBC Singapore’s Green Deposit Account launched in January 2020 for corporate clients to finance green initiatives, and OCBC’s sustainability-linked structured deposit for retail investors launched in September 2021. There is currently no market failure or gap that requires MAS to support green deposits with grants, as it currently does for other sustainable and sustainability-linked solutions which face additional costs or other constraints.