The Monetary Authority of Singapore (MAS) has announced a US$2bn green investments programme (GIP) to invest in public market investment strategies that have a strong green focus. This is designed to help support the Singapore financial centre in promoting environmentally sustainable projects and mitigating climate change risks in Singapore and the region.
The GIP is a major prong of the green finance action plan announced by Singapore minister for Education and MAS board member Ong Ye Kung, at the 2019 Singapore FinTech Festival (SFF) x Singapore Week of Innovation and TeCHnology (SWITCH). The GIP aims to foster the growth of a strong and diverse ecosystem of green financing capabilities in Singapore.
MAS will place funds with asset managers who are committed to drive regional green efforts out of Singapore and contribute to MAS’ other green finance initiatives including developing green markets and managing environmental risks. Selected managers will be those who have demonstrated a firm commitment to deepening their green investment capabilities across functions such as research, stewardship, policy and portfolio management, accelerate local capability transfers, and increase the management of green-focused funds in Singapore.
MAS says it is 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. The green capabilities and experience of the team managing the strategies will be a key part of the evaluation. 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 GIP will be a US$100m placement in the Bank for International Settlements (BIS)’ Green Bond Investment Pool (GBIP). Together with other participating central banks, MAS hopes that this initiative will help catalyse further deepening of the green bond market.
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