China and Singapore have taken a bold step in forging a groundbreaking financing collaboration to create a more sustainable future. The two major Asian economies have established the China-Singapore Green Finance Taskforce (GFTF) to deepen bilateral cooperation in green and transition finance.
The initiative aims to foster public-private sector collaboration and drive the transition to a low-carbon future in the region.
Harmonizing taxonomies and definitions
The GFTF’s initial focus will be on finding common ground between the taxonomies and definitions used by China and Singapore with regard to their existing transition activities.
The Monetary Authority of Singapore (MAS) and the People’s Bank of China (PBC) will work together under the International Platform on Sustainable Finance (IPSF) to achieve interoperability between their taxonomies.
The collaboration will also help deepen the understanding of transition activities defined by the two countries.
Strengthening sustainability bond market connectivity
Another significant area of focus for the GFTF will be strengthening the sustainability bond market connectivity between China and Singapore.
The Singapore Exchange and China International Capital Corporation will establish a workstream aimed at enhancing mutual access to green and transition bond products in both countries.
This includes issuances and access to a range of financial instruments that support environmentally sustainable initiatives.
Leveraging technology for sustainable finance adoption
The GFTF will also explore the use of technology to facilitate sustainable finance adoption. The Metaverse Green Exchange and Beijing Green Exchange will establish a workstream focused on leveraging technological advancements to support green financing efforts.
This includes the piloting of digital green bonds with carbon credits, which can help streamline the adoption of sustainable financing practices across the region.
Gillian Tan, MAS’ assistant managing director and chief sustainability officer, expressed her enthusiasm for the collaboration, stating that the GFTF will “galvanize collaboration between public-private participants from China and Singapore on concrete initiatives that will catalyze capital flows to support a credible and inclusive transition to a low carbon future for our countries and the region.”
The GFTF is co-chaired by Tan and Dr. Ma Jun, chair of the China Green Finance Committee. Its members comprise senior representatives and sustainable finance experts from financial institutions and green FinTech companies in both China and Singapore.
As the world grapples with the impacts of climate change, this groundbreaking collaboration between China and Singapore offers a promising path towards a more sustainable, low-carbon future.
