Published Date: 08 June 2022
"Towards Net Zero in Asia" - Opening
Remarks by Mr Ravi Menon, Managing
Director, Monetary Authority of Singapore, at
the Launch of GFANZ's Asia Pacific Network
Central Office on 8 June 2022
Friends and colleagues
Ladies and gentlemen, good morning.
There are four key enablers for the journey to net zero:
carbon pricing in some form;
emissions standards, across various activities;
technological advances, in renewables as well as energy efficiency;
green finance
This fourth enabler is where the financial sector can play a critical role - both the
financial industry and those who regulate it - in getting us to net zero.
The starting point for climate action in the financial sector is through the gateway of risk
management. Before the financial sector can do good, it must first ensure that it comes to
no harm. Hence the importance of ensuring that the financial system is climate resilient -
that it can identify and manage the risks associated with both climate change and
mitigating actions.
Seven years ago, Mark Carney - when he was chairman of the Financial Stability Board,
and I had the great pleasure of working with him - socialised the importance of managing
climate-related financial risks. The work that Mark initiated through the Task Force on
Climate Related Financial Disclosures ("TCFD") has led to a broad consensus today on the
relevance of climate-related risks to financial decisions.
Beyond ensuring that the financial system is resilient to climate risk, we need to make the
financial sector a force for good - namely, to facilitate the transition towards a lower
carbon economy. If the world is to reach net zero, the financial sector needs to be at the
vanguard.
Many financial institutions pledged net zero goals in the lead-up to COP26 last year. This
is remarkable against the backdrop of a world that was still struggling to emerge from a
global pandemic that had disrupted millions of lives and livelihoods. It shows seriousness
of commitment. The GFANZ is a powerful expression of that collective will to do the right
thing for the planet.
While net zero is a 2050 goal, the critical decade for climate action is this - 2020 to 2030.
To achieve net zero by 2050, the world must decisively bend the emissions curve and
achieve substantial reductions by 2030. This is not a far away problem. The time for
action is now.
The setting up of the GFANZ Asia-Pacific Network is timely. Asia is where the battle
against climate change will be won or lost. Energy demand in Asia is expected to double
by 2030 on the back of economic growth, urbanisation, and rising affluence. Some 45
million people in Southeast Asia still do not have access to electricity. Fossil fuels will
continue to play an important role in meeting the energy demands of Asia, at least for the
next few years.
The key to addressing the tension between development and decarbonization lies in
credible and inclusive transition pathways, based on strong public-private partnerships.
Transition plans should enable progressive decarbonisation that is aligned to net zero
goals while taking account of developmental needs and providing support for
communities to pivot to new growth opportunities in a green economy.
The GFANZ Asia-Pacific Network has the potential to spearhead this effort in Asia,
mobilising banks, insurers, asset managers, and service providers in this part of the
world, and facilitating alignment in a credible and inclusive transition towards net zero.
I am pleased to be part of this effort as Chair of the Advisory Board of the GFANZ
AsiaPacific Network, from two perspectives.
First, as Chair of the Network of Central Banks and Financial Supervisors for Greening the
Financial System ("NGFS"), I look forward to opportunities for collaboration between the
NGFS and GFANZ, exploring further how financial regulators and financial institutions can
work together to address climate related risks and advance the net zero agenda.
Second, from the perspective of the MAS, which is actively working with the financial
industry to develop green finance solutions, markets, and infrastructure, I look forward to
opportunities for partnership between MAS and the GFANZ Asia-Pacific Network to
promote a vibrant green finance ecosystem here in Asia.
The task ahead is daunting. Asia is diverse - across stages of economic development, and
across a variety of climate related risks and transition challenges. But the task is hugely
purposeful, and if we succeed, transformative. For if we can successfully help Asia
transition to net zero, it will go a long way in getting the world to net zero.
Thank you very much.
*****