The path ahead for climate action is more uncertain today than it has been since the conclusion of the Paris Agreement in 2015. Geopolitical shifts and heightened trade and economic uncertainty present significant challenges to climate action. We have also seen withdrawals of financial institutions from Global Net Zero Alliances, with other institutional supporters of climate action reassessing their commitments.

Notwithstanding these headwinds, Singapore continues to take a long-term view on sustainability and remains committed to effective climate action. We submitted our enhanced 2035 Nationally Determined Contribution (NDC) earlier this year. This reaffirms our goal to achieve net-zero emissions by 2050 and anchors our strategy to develop a competitive, low-carbon economy that drives green investment and innovation.

The stakes are high. The Asian Development Bank (ADB) has highlighted that climate inaction could lead to a 17% drop in Asia Pacific’s GDP by 2070 if high emissions persist, and this could rise to 41% of GDP by the end of the century. A further delay in action may increase the vulnerability of countries and companies to climate shocks when they materialise and necessitate sharper and more disruptive transitions eventually. Taking action early will better enable us to adjust to and thrive in a climate-impacted global economy.

Fortunately, the economic case for Asia's transition is growing. For instance, in parts of Asia, renewable energy already makes up a significant share of the energy mix, supported by its falling costs. There will also be sizeable economic opportunities created by this transition. The ADB estimates that manufacturing related to renewable energy in Southeast Asia could generate up to US$100 billion in annual revenue by 2030 and create up to 6 million jobs by 2050.

Amidst the region's transition, we have made good progress in building a climate-resilient financial sector. In 2024, MAS conducted its first Industry-Wide Stress Test focused on climate physical risks compounded by macroeconomic stresses, as part of our efforts to enhance the industry's capabilities to assess climate resilience.

As a leading sustainable finance centre, MAS and Singapore remain committed to supporting the region’s transition to a more sustainable future, for example through the newly-launched Industrial Transformation infrastructure debt programme under the Financing Asia's Transition Partnership (FAST-P). As energy demand in Southeast Asia grows, we will also work with our ASEAN partners to support the financing of key infrastructure such as the ASEAN Power Grid to strengthen regional energy integration.

Through our partnership with the Institute of Banking and Finance (IBF), we will also continue to equip professionals with the skills needed for sustainable finance and build a strong pipeline of future talent to support the industry's transformation.

As an organisation, we continue to demonstrate leadership through reducing our corporate carbon emissions and managing a climate-resilient portfolio. This includes continuing with our multi-pronged efforts to encourage greater adoption of Fit notes and lesser reliance on new notes for festive gifting to reduce MAS' scope 3 emissions and extending the Climate Transition Programme to corporate bonds as part of our continuing efforts to mitigate portfolio climate risks, in particular transition risks.

While the road ahead will have its challenges, continued collaboration between MAS and industry stakeholders will position us well to strengthen our financial sector's resilience and build a sustainable future for Singapore and the region.

Gan Kim Yong
Chairman