Three initiatives to expand SG’s green finance ecosystem

There is a huge opportunity in the market for voluntary carbon credits.

Minister of Finance Lawrence Wong, in a speech delivered 30 September, noted three initiatives that would help scale up Singapore's green finance ecosystem.

These are scaling up the carbon credits market, catalysing sustainable financing and investing, and building the capacity of Singapore's finance community.

"This market for voluntary carbon credits is huge. It’s also important because carbon credits can help direct private financing to climate-action projects that would otherwise not get off the ground," Wong said on the first initiative.

He noted that the government is willing to support private-sector initiatives on developing Singapore's carbon credit market. He cited Climate Impact X as one of these initiatives, a joint project by Temasek, DBS, SGX, and Standard Chartered Bank.

On sustainable financing and investing, Wong said the government is laying out the rules and frameworks to connect different stakeholders.

"We recognise that public efforts alone will not cover the scale of climate change mitigation in the region. So we are also heartened to see efforts from the private sector to help close funding gaps for sustainable projects," Wong said.

On building capacity, Wong noted the need for new capabilities and skillsets, such as specialised expertise to quantify environmental benefits and the costs of projects, tools to report sustainability metrics and estimates on how environmental costs translate to future default risks.

"I have touched on three areas on the initiatives we are embarking on around carbon credits markets, sustainable finance solutions and products, as well as building new capabilities," Wong said.