Ravi Menon: Being the change we want to see - a sustainable future Speech (via video conference) by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at the Launch of the Inaugural MAS Sustainability Report, 9 June 2021. * * * Good morning, and welcome to the launch of MAS’ inaugural Sustainability Report . How the world responds to the climate challenge will determine the future of generations to come. To avoid the most severe effects of climate change, global greenhouse gas emissions must come down 45% by 2030 and reach net zero around 2050 to keep global warming to within 1.5 degrees Celsius above pre-industrial levels. This is what 195 countries resolved as part of the Paris Agreement in 2016. Concerted action is necessary for the world to make the transition to a sustainable future. There is a renewed sense of urgency and commitment to the climate agenda. Despite the pandemic, 2020 witnessed numerous commitments to carbon neutrality and net zero emissions – by governments, corporations, and financial institutions. The United States has rejoined the Paris Agreement. The stage is set to translate long-term ambitions into tangible policies and early actions. Singapore is firmly committed to doing its part in the global effort to reduce greenhouse gas emissions. Earlier this year, the government launched the Singapore Green Plan, which sets out a comprehensive road map towards sustainable development, a green economy, and net zero emissions.

A taxonomy that includes both green and transition activities can support a progressive shift to greater sustainability. In Singapore, the green finance industry task force I mentioned earlier is developing such a taxonomy to guide our financial institutions. It sets out a “traffic light” system to classify sustainable activities as green, transition activities as yellow, and highly carbon intensive activities as red. MAS has been working with the industry to promote green finance solutions. MAS has introduced grant schemes to defray the costs of issuing sustainable bonds and green and sustainability-linked loans that are in line with international standards. Funds raised through such bonds and loans will support investments in green projects. We are supporting initiatives to foster efficient markets to trade carbon credits. Carbon credits help to channel funds from firms with hard-to-abate emissions to projects that reduce or remove emissions. Voluntary carbon credits will be an important complement to decarbonisation efforts, especially in Asia where transition issues need to be tackled. MAS is supporting industry efforts to build the infrastructure for a liquid and transparent voluntary carbon credit market in Asia. DBS Bank, SGX, Temasek, and Standard Chartered have announced plans to launch 4/9  BIS central bankers' speeches  Climate Impact X, an international marketplace for high-quality carbon offsets generated from nature-based solutions in Southeast Asia. MAS is promoting Green FinTech – harnessing technology to enable trusted and efficient sustainable finance flows. The lack of access to trusted high-quality data on a project’s carbon emissions is probably the biggest impediment to green finance.