SINGAPORE – Even though Singapore accounts for only a tiny fraction of global emissions, it aims to use “green financing”, technology and innovation to help mobilise the fight against “the ultimate challenge for humankind” of climate change, Education Minister Ong Ye Kung said on Monday (Nov 11).

Mr Ong, who is also a board member of the Monetary Authority of Singapore (MAS), said: “Singapore accounts for only 0.11 per cent of carbon emissions in the world. By our actions alone, we cannot change the world. But through our actions, we hope we can inspire it, we can catalyse change.”

Speaking on the first day of the Singapore Fintech Festival x Singapore Week of Innovation and Technology 2019 (SFF x Switch), Mr Ong also unveiled a new US$2 billion (S$2.72 billion) green investment fund.

The week-long event will see about 1,000 exhibitors and 60,000 participants from around the world convening at the Singapore Expo to discuss the rise of financial technology (fintech) as well as other high technology industries, and their impact on the world.

With “Sustainability and Climate Change” as this year’s theme, Mr Ong announced a series of new green initiatives that Singapore will undertake to do its part in tackling climate change. They included the US$2 billion green investment programme and a push to further promote “green bonds”, a form of lending directed at sustainable projects.

This programme is a “major prong of the green finance action plan” to fund green-focused programmes out of Singapore, the MAS in a statement on Monday.

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Mr Ong said that green finance was a key plank in addressing climate change because “finance mobilises the resources of the world”. That was the rationale behind the Government’s goal for Singapore to be a leading centre for green finance, promoting sustainable development in Asia and globally.

He added: “As a leading international financial centre, Singapore will do the right thing to help reduce carbon emissions and promote sustainable development in Asia and globally.”


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If the world continues on “business as usual”, Singaporeans could see day temperatures soar to 40°C by 2045, a team of scientists at the Centre for Climate Research Singapore told TODAY in August.

A World Economic Forum report earlier this year ranked Singapore at only 66th in the world in its commitment to environmental sustainability. Singapore had fewer environment-related technology inventions per capita than countries with similar competitiveness, such as the United States and Switzerland.

Under global agreements, more developed countries bear a greater responsibility to combat climate change, since emerging market economies are still in the process of combating poverty, which typically leads to rising energy demands.

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Consequently, the United Nations adopted this “common but differentiated responsibilities” principle on climate change in 1992, which then formed the basis of the Paris Agreement.

Mr Ong stressed that tackling climate change should not curtail the growth of developing nations. He noted Prime Minister Lee Hsien Loong’s recent speech at a climate action summit in New York in which he said: “Climate change is the ultimate global commons challenge.” Mr Lee stressed then the urgency of addressing a problem with “very major consequences”.


The number of green businesses, infrastructure and technologies that are working towards this goal are growing. Financing them will not only help the economy and businesses, but also drives green investment decisions and “a virtuous circle” of economic growth that is environmentally sustainable, Mr Ong said.

He noted the positive signals for the viability of green technologies:

Relying more on renewable energy is feasible: The International Energy Agency (IEA) has developed a 2040 scenario, involving a fourfold shift to hydro and other renewable sources of energy and a shift away from fossil fuels. This is able to reduce air pollution yet still grant universal access to energy.

Growing global demand for green energy: In China, the share of energy supply from coal fell from 70 to 64 per cent, while renewable energy sources increased their share from about 3 per cent to 6 per cent from 2008 to 2017. In the US, renewable energy from solar and wind sources has also become highly competitive.

Asean is also on board: The Association of South-east Asian Nations (Asean) has set a target to derive 23 per cent of its energy from renewable sources by 2025, up from about 15 per cent today.


Mr Pavan Sukhdev, president of non-governmental organisation WWF International, said at the conference that green finance is the “next stage” of climate action to help environment-focused businesses grow and flourish.

However, Mr Ong said that green financing is still lacking in financing climate action in several ways:

Fossil fuel financing: Funds flowing into pollutive and non-renewable fuel sources are still significant, totaling US$1.9 trillion in the three years following the Paris Agreement. This figure is still rising each year, based on a report by the Rainforest Action Network.

Global green bonds: These investment instruments geared towards environmental and climate projects as a priority make up “only a sliver of total bond issuance”, Mr Ong noted. It was just 2.5 per cent, or US$168 billion, in 2018.

Natural disasters: The financial system is still not resilient to climate change risks, such as flood disasters and rising sea levels. If temperatures rise by 2°C, about US$1.7 trillion of global financial assets — 2 per cent of the world economy — will be at risk. It is also difficult to measure these risks, such as how property values change when sea levels and carbon prices increase.

Policy and transitional risks: As the world shifts towards renewable energy sources, fossil fuel assets — oil refineries, shipping and other infrastructure — could suffer from a premature death and risk becoming “stranded”, thus affecting loans and investments across the energy industry and building sectors. This could total US$20 trillion globally from now until 2050.


In its bid to protect the environment, Singapore has already implemented several green initiatives before other countries, Mr Ong said.

It is the only country in Asia and also one of a handful of countries across the world to have imposed a broad-based carbon tax.

Singapore has capped the growth of its car population.

It has long built greenery into the cityscape.

The Government has launched a Zero Waste Master Plan, to create a circular economy in which waste is seen as a resource and not merely a by-product of consumption.

Mr Ong said that Singapore wants to do more. Revealing a green finance action plan to tackle climate change, Singapore will take “three concrete steps” by building financial systems that are resilient to environmental risks, then develop green finance solutions and markets, and finally leverage innovation and technology, he said.

The plan includes several new developments for the MAS:

New environmental risk management guidelines: A consultation paper will be released by March next year on new guidelines that will set standards on how to measure, limit, and disclose businesses’ exposure to environmental risks for the banking, insurance and asset management sectors.

Green lending: MAS will develop grant schemes to help defray the cost of borrowing for green and sustainably linked projects and businesses, in a bid to encourage growth in such loans, which Mr Ong said is a nascent industry in Asia. Banks are the main source of these funds.

US$2 billion Green Investments Programme: MAS will place funds with asset managers in “public market investment strategies” that have a strong green focus. These are managers who have demonstrated “a firm commitment to deepening their green investment capabilities” across various functions such as research, stewardship and policy.

US$100 million placement in the Bank for International Settlements (BIS): Out of the US$2 billion in the Green Investments Programme, US$100 million will go to BIS’ Green Bond Investment Pool to support its green finance initiatives.

Building capability in green finance: To aid finance industry professionals, the MAS will develop a scheme to support external reviewers and rating agencies who assess and certify green financing instruments when they expand their operations here.

Building more Centres of Excellence: The MAS will work towards attracting more of such centres to set up here. These will help add to Asia-focused climate research and be applied in the financial sector. There is already keen interest from global research organisations to work with Singapore educational institutions to establish these centres.

Encouraging more ideas and applications: Green finance will be a key theme for next year’s Singapore Fintech Festival, placing environmental-focused fintech at the pinnacle of Singapore’s fintech journey, Mr Ong said.

“Finance, innovation and technology are a force for good, to overcome challenges and improve lives. Climate change is the ultimate challenge for humankind,” Mr Ong added.

“It cannot be that the two objectives of being green and pursuing growth are irreconcilable. With imagination, innovation, technology, determination, we can reconcile them.”

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