They must acquire the expertise needed to mitigate the risk of greenwashing. MAS is working to anchor in Singapore relevant centres of excellence, think tanks, and research networks. 5/7  BIS central bankers' speeches  We want to promote sustainability research tailored for Asia’s needs and the capacity to train a strong pipeline of professionals in green finance. The recent launch of the Singapore Green Finance Centre, a partnership between Singapore Management University and Imperial College Business School, is a major step in this direction. I am pleased to announce two more developments on this front. First, Moody’s Corporation is building a comprehensive suite of ESG resources out of Singapore to spearhead its sustainable finance agenda in the Asia-Pacific. Moody’s key initiatives in Singapore include: an ESG Centre of Excellence for investor outreach, engagement and training; and an ESG-focused Innovation Lab and Technology Accelerator to develop ESG analytical solutions and assessment tools in partnership with local FinTech firms. Moody’s will also dedicate significant ESG resources in Singapore to: provide end-to-end sustainability solutions for companies and sovereigns; and deepen ESG insights in the Asia-Pacific for existing credit ratings and risk management frameworks. Moody’s new ESG efforts will help position Singapore as a leading international centre for ESG finance and investment. Second, the Sustainable Finance Institute Asia (SFIA) has established its headquarters in Singapore. SFIA, an independent research and capacity building institute, aims to support the implementation of sustainable finance policy initiatives in Asia.

The lack of consistency and transparency affects investors’ ability to monitor progress in emissions reduction or measure outcomes in sustainability. We are tackling this issue through four strategies. First, provide guidance for asset managers to assess, monitor, mitigate and disclose environmental risks. MAS recently issued to all financial institutions guidelines on environmental risk management incorporating best practices drawn from around the world. In fact, MAS co-created these guidelines with IMAS, actively engaging asset managers to better understand industry practices. I am pleased that IMAS will be conducting workshops to strengthen capabilities in this area. 4/7  BIS central bankers' speeches  Second, develop taxonomy to identify and classify activities that can be considered green or in transition towards green. An industry-led green finance task force has issued a consultation paper setting out a green taxonomy for Singapore-based financial institutions. The taxonomy references international best practices and adapts them to the Asian context where relevant. A unique feature of the proposed taxonomy is that it covers transition activities that allow for a progressive shift towards greater sustainability while supporting inclusive economic and social development. It adopts a “traffic-light” system which sets out how activities can be classified as green, yellow, or red according to their level of alignment with environmental objectives. The taskforce will develop, in its next phase of work, a combination of principle-based criteria and quantifiable thresholds for green and transition activities. Third, promote active stewardship by investors to promote sustainability in their investee companies.