Green Finance Industry Taskforce (GFIT) Taxonomy Public Consultation

There is increasing attention from consumers on financial products and services that are labelled as “green”. Products and services that identify as such have grown in popularity, and by 2020 USD 40.5 trillion worth of assets applied ESG data as part of investment decisions, double that of four years earlier. However, despite this increasing interest in green / sustainable finance, there have been concerns over greenwashing. These concerns may be inhibiting development of green finance. There has therefore been a move in some markets to create a system of classification or standards that would help financial market participants and their stakeholders communicate through a shared understanding. One such approach is the creation of a taxonomy.

Singapore, as a leading financial centre, can play an active role in advancing the green finance agenda and serve green financing needs in the region. Convened by the Monetary Authority of Singapore, the Green Finance Industry Taskforce (GFIT) is an industry-led initiative to accelerate the development of green finance through four key initiatives: (i) develop a taxonomy (ii) enhance environmental risk management practices of financial institutions (iii) improve disclosures, and (iv) foster green finance solutions. Under the first focus area, the GFIT is exploring the development of a taxonomy for Singapore-based financial institutions, with particular relevance to those active across ASEAN. The attached document sets out thinking around the potential development of a taxonomy that classifies activities that can be considered green or in transition, the benefits and risks, and a proposed way forward. The document poses questions for feedback. The GFIT welcomes your feedback by 11 March 2021.

Once feedback has been received, the GFIT will move to the next phase of work, incorporating feedback, with the direction of work informed by such feedback. The GFIT is particularly interested to hear views on the need for a taxonomy, its environmental objectives, focus sectors, focus on transition, and proposed ‘traffic light’ classification system for activities within these focus sectors.

Please click here to submit feedback to the GFIT Taxonomy Consultation Paper (by 11 March 2021)

ABS member banks are requested to submit their responses through the ABS Online Feedback Portal.

Please click here for the MAS Media Release on 28 January 2021