Singapore's Monetary Authority Wades Into Green Investments - Emerging Market Views

Singapore’s Monetary Authority Wades Into Green Investments

The Monetary Authority of Singapore (MAS) announced Monday it set up a US$2 billion program to invest in public-market strategies with a strong green focus.

“This will help to support the Singapore financial center in promoting environmentally sustainable projects and mitigating climate change risks in Singapore and the region,” the MAS said in a press release in conjunction with the Singapore Fintech Festival.

Singapore’s central bank will place the funds with asset managers who will drive regional green efforts from a Singapore base and who will contribute to MAS’s other green initiatives, including developing green markets and managing environmental risks, the statement said.

The managers must show “firm commitment” for expanding green investment, including a focus on research, policy, portfolio management and transferring local capabilities as well as increasing the management of green-focused funds in Singapore, MAS said.

“We are also looking for managers who can demonstrate their capabilities in incorporating environmental considerations into their investment process and actively directing capital towards investments that have a better green profile,” MAS said. “The deep engagement with these asset managers will help to further the development of Singapore’s green financing ecosystem, as well as strengthen MAS’ understanding of climate change risks and to better position MAS’ own investment portfolio for long-term sustainable returns.”

The first investment under the program will be a US$100 million placement in the Bank for International Settlements’ green bond investment pool, MAS said.

The MAS program followed themes Minister of Education and MAS board member Ong Ye Kung highlighted in a speech to the Fintech Festival conference.

“Singapore’s financial sector can play a decisive role in promoting sustainable development opportunities and powering the transition [to renewable energy], especially in Asia,” Ong said, according to prepared remarks. “With our experience in financing the region and capabilities in technology, we can make a unique contribution. Our goal is to be a leading center for Green Finance in Asia and globally.”

Ong said Singapore can help spur investments in renewable technology, grid infrastructure, and battery storage, as well as push for investment in green buildings and efficient cooling to optimize energy use.