“Onwards and Upwards”

In the poem The Present Crisis, James Russell Lowell discusses the sociopolitical issues of his time. One extract, in particular, stands out to me:

Although Lowell’s words were penned in a different historical and cultural context from contemporary 21^st century life, I cannot help but reflect on their pertinence for the global effort to create a more sustainable future.

The latest Intergovernmental Panel on Climate Change (IPCC) report warns that climate change of 1.1 degrees Celsius of warming is already causing widespread disruption in every region of the world. Unless we take swift and decisive action to tackle climate change, the world will suffer from increasingly severe impacts including drought, extreme heat, and sea level rise. Consequently, human society will also suffer from compromised food, water, and energy security. 

New occasions teach new duties

However, the IPCC report also sets out the immense capacity that we have to bring to bear to protect current and future generations from harm – policy, infrastructure, and technology interventions could reduce greenhouse gas emissions by as much as 70% by 2050. 

Finance, in particular, is a powerful tool for tackling the climate crisis. However, tracked financial flows remain up to six times less than the levels needed to achieve climate mitigation goals across all sectors and regions; and up to ten times less in the case of adaptation finance. 

Sustainable finance activity has accelerated significantly in Singapore and the region. Singapore is now ASEAN’s largest sustainable finance market, accounting for close to 50% of cumulative ASEAN green and sustainability-linked bond and loan issuances. From 2018 to 2021, over S$39.8 billion of green and sustainability-linked loans have been issued in Singapore. Notably, sustainability-linked loans experienced continued sustained growth with a quadrupling of volumes from 2019 levels.

MAS has made good progress on sustainability initiatives in its physical operations, reserves management, financial supervision, and development of the financial sector.

To reduce our organisational carbon and environmental footprint, we developed a framework to reduce emissions from business air travel and embarked on measures to further reduce our upstream and downstream emissions from currency operations.

To develop a climate-resilient investment portfolio, we are taking targeted portfolio actions to manage transition risks in the near-term. We will continue in our efforts to assess and manage the impact of climate risks on long-term returns, guided by medium-term signposts on the transition pathways and associated climate change impacts. 

To strengthen the financial sector’s resilience against environmental risks, we conducted thematic reviews of financial institutions’ progress in implementing the Environmental Risk Management Guidelines, and issued information papers to share key observations and progressive industry practices. We have also supported international sustainability reporting efforts.

To develop a vibrant green finance ecosystem, we have intensified efforts to be a regional knowledge and talent hub for sustainable finance by anchoring a third Centre of Excellence and setting out Sustainable Finance Technical Skills and Competencies. We also launched pilot programmes for the ESG Disclosure Platform and ESG Registry under Project Greenprint, to catalyse sustainability data flows between the real economy and the financial sector.

In this year’s Sustainability Report, MAS has introduced and enhanced new quantitative metrics and targets to further align with the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD), including: 

• 2030 targets for Scope 1, Scope 2 and Scope 3 (business air travel and outsourced currency operations) emissions reduction;
• 2030 targets for energy and water efficiency, as well as waste disposal, in line with GreenGov.SG's targets;
• 2030 target for emissions intensity reduction in the investment portfolio; and
• Expanded analysis of Weighted Average Carbon Intensity (WACI) of investment portfolio.  

Ward still, and onward

We need to build on the progress that MAS and the financial sector have achieved so far, and continue to “ward still, and onward”.  

First, in view of Singapore’s recent national commitment to achieve net-zero emissions by or around mid-century, MAS will strive towards setting a net-zero emissions target for our physical operations at the earliest possible timeframe. The interim emissions reductions targets that we have set for 2030 will kickstart early action.

In particular, we recognise the strong interlinkages between different Environmental, Social, and Governance (ESG) issues. The destruction of ecosystems exacerbates climate change. Deforestation and the wildlife trade, which contribute to climate change and biodiversity loss, also increase the risk of future diseases and pandemics. 

MAS has taken early action to ensure that its policies and programmes address multiple aspects of sustainability, and hopes to continue to tap synergies in this space. Project Greenprint harnesses the power of technology to help capture and compare ESG data to support high-quality sustainability disclosures. MAS’ bond and loan grant schemes support green, social and sustainable instruments with funding, so long as the grant criteria is met. MAS also supported the inclusion of “do no significant harm” and “biodiversity” as two out of the four criteria in the industry-led taxonomy. 

Keep abreast of Truth

Finally, our partners in sustainability have been critical to the success of our sustainability efforts. We hope to continue to forge closer partnerships in the public, private, and people sectors, and promote innovative collaborations in areas such as ESG data and blended finance. MAS contributes actively on a number of regional and international fora and multilateral discussions on climate-related risks and sustainable finance, including taking leadership positions in international platforms.

Working together, I hope that we may always “keep abreast of Truth”, and facilitate a just transition to a low carbon economy that leaves no one behind.

Dr Darian McBain
Chief Sustainability Officer