Green Finance Industry Taskforce (GFIT) Taxonomy Public Consultation

There is increasing attention from consumers on financial products and services that are labelled as “green”. However, despite this increasing interest in green and sustainable finance, there have been concerns over greenwashing. These concerns may be inhibiting the 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), whose term ended in April 2023, 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 developed the Singapore-Asia Taxonomy for Singapore-based financial institutions, with particular relevance to those active across ASEAN. The first, second and third consultation papers were released in January 2021, May 2022 and February 2023 respectively. Further details of the consultation papers are set out below.

A fourth and final consultation paper is released by MAS on 28 June 2023 which seeks views on the detailed thresholds and criteria for the early phase-out of coal-fired power plants (CFPPs) under the Singapore-Asia Taxonomy.

The inclusion of managed coal phase-out under the Singapore-Asia Taxonomy aims to provide a credible standard to increase participation in projects for the early retirement of CFPPs that are aligned with a 1.5 degrees Celsius (1.5°C) transition pathway.

The GFIT welcomes all feedback on this document by 28 July 2023.

Fourth GFIT Taxonomy Consultation Paper released by MAS

Please click here to submit feedback to the Fourth GFIT Taxonomy Consultation Paper (by 28 July 2023)

ABS member banks are requested to submit their responses here.

Please click here for the MAS Media Release on 28 June 2023

First, Second and Third GFIT Taxonomy Consultation Papers

The first consultation paper sought feedback on the broad approach, including the adoption of a novel “traffic light” approach to classification, as well as potential measures of success, and risks to consider.

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

Reflecting on the feedback received as well as key developments in the sustainability space, the second consultation paper expanded on the traffic light approach, and added granularity to the application and thresholds for classification, supported by science and data.

Please click here for the MAS Media Release on 12 May 2022

The third consultation paper looked into the detailed thresholds and criteria for classification of green and transition activities in five sectors: (i) agriculture and forestry / land use; (ii) industrial; (ii) waste and water; (iv) information and communications technology; and (v) carbon capture and sequestration.

The consultation also sought views on the “Do No Significant Harm (DNSH)” criteria which specifies that activities making a substantial contribution to climate change mitigation should not be carried out in a manner that would cause significant adverse impact to the other four environmental objectives under the taxonomy.

Please click here for the MAS Media Release on 15 February 2023