On 3 December 2023, the Monetary Authority of Singapore (MAS) launched the Singapore-Asia Taxonomy for Sustainable Finance (Singapore-Asia Taxonomy), which sets out thresholds and criteria for defining green and transition activities that contribute to climate change mitigation across eight sectors.
The CGT Phase 3 research report recently launched by HKGFA and Guangdong Green Finance Committee in October carries common goals and recommendations of the latest Singapore-Asia Taxonomy in several key areas such as:
- Developing a credible transition finance definition and framework to provide support to the decarbonisation of hard-to-abate sectors.
- The importance of defining credible transition thresholds for sectors that find it challenging to reduce emissions due to current technological constraints. Regular review of the thresholds and interim timeframe before actual phase-out should be considered as viable technological solutions continue to develop.
- Enhancing interoperability between global taxonomies. MAS is working to map Singapore-Asia Taxonomy to the IPSF CGT while HKMA also aims to develop a green classification framework aligning with the CGT.
- Working towards these alignments, market practitioners in the region will be able to refer to a common set of definitions under the CGT, which would enhance harmonisation in the region, increase taxonomy-aligned financing solutions and facilitate sustainable development in markets which the CGT covers and increase cross-border financing flows.
To read more about MAS’s press release: https://www.sgpc.gov.sg/api/file/getfile/MAS%20Media%20Release_MAS%20Launches%20Worlds%20First%20Multi-Sector%20Transition%20Taxonomy.pdf?path=/sgpcmedia/media_releases/mas/press_release/P-20231203-3/attachment/MAS%20Media%20Release_MAS%20Launches%20Worlds%20First%20Multi-Sector%20Transition%20Taxonomy.pdf
For more information on CGT Phase 3 research: https://www.hkgreenfinance.org/wp-content/uploads/2023/09/CGTIIIEng03_10_1730_final.pdf