It pioneered an innovative sukuk structure where the returns are dependent on the performance of the selected schools which are supported by proceeds from the sukuk investments. The issuance of more SRI sukuk in the future would further reinforce the value proposition of Islamic finance that combines financial returns and social welfare enhancement. Another key innovation with far reaching potential is the creation of a new financial asset class that is backed by carbon credit-based solutions structured using Islamic finance principles. This idea has enormous potential to incentivise concrete actions by businesses to reduce carbon emissions. The industry should endeavour to capitalise on the commitment of the government, as announced by the Prime Minister of Malaysia on 12 April 2016, to consider providing incentives to buyers of Malaysian rainforest carbon credits to spur the development of this new asset class. Over the longer term, the first precondition to sustain a value-based financial ecosystem is to direct serious efforts at aligning performance measures to take into account both economic and social outcomes. BIS central bankers’ speeches  3  In Malaysia, Islamic financial activities are governed by a comprehensive contract based regulatory framework designed to achieve end-to-end Shariah compliance. Consistent with this framework, Islamic financial institutions are expected to evaluate and manage the impact of their activities, beyond that which is solely concerned with financial gains. To further entrench this shift, a proposal is being developed for Islamic financial institutions to disclose their Corporate Value-Intent (CVI) as a measure of their performance and commitment towards value creation.

Diversity in financing instruments has also widened beyond green bonds, with around half of the funds raised so far in 2021 expected to come from the issuance of sustainability, sustainability-linked bonds as well as transition bonds. Fourth, an equity capital market with significant potential for growth. Singapore’s public equity market has seen increased trading interest amid the COVID-19 pandemic. However, other exchanges in the region have grown even faster. SGX has traditionally had more active volumes in less volatile, income-generating investments, such as REITs, compared to other growth-focused exchanges. This is a gap we are committed to bridging. An extensive consultation with market participants last year highlighted two key challenges: a perceived lack of institutional investor interest, and a dearth of high-growth companies listing in Singapore. These are chicken-and-egg challenges. The public and private sectors have together come up with a slate of measures to enhance the ability of our equity market to better meet the needs of issuers and investors: strong co-investment support; reduced listing costs and improved research coverage; a new listing pathway; and a platform for sustainable investments. We have launched two new funds for co-investment. The government has come together with Temasek Holdings to establish a new $ billion fund, called Anchor Fund @ 65, which will act as a cornerstone investor for promising companies looking to list on SGX.