New multi-stakeholder initiative launched in Singapore to drive excellence in sustainable finance
The financial sector is crucial in creating resilient and sustainable economic growth through its ability to influence companies to adopt best practices and to direct financial flows towards sustainable development outcomes. As a key global financial hub, Singapore is an important conduit for capital flows into the Asia region, and as such its financial institutions have significant potential to shape resilient regional economies. In addition, ASFI can foster peer-to-peer sharing with other national sustainable finance initiatives in the region.
According to a joint statement by the Ministry of Environmental and Water Resources (MEWR) and the Monetary Authority Singapore (MAS), “[p]artnerships and collective action are essential to achieving sustainable development. With increased global recognition of the role that the financial sector has to play to achieve sustainability, MEWR and MAS welcome the formation of ASFI which will help the financial sector advance this agenda in Singapore and the region.”
Sustainable finance is a critical lever to address the increasing vulnerability of the region to climate change, the degradation of land and ocean ecosystems, labour and human rights, and water risk. At the same time, the shift to sustainable economies represents around $5 trillion of investment opportunities between now and 2030 in Asia alone. To support the finance sector in navigating these risks and opportunities, ASFI was developed to speed up the integration of Environmental, Social, and Governance (ESG) principles into financial decision-making, and to ensure that this leads to measurable and meaningful outcomes aligned with the Paris Agreement and the Sustainable Development Goals (SDGs).
“Today’s pressing environmental and social challenges threaten the political and economic stability of Asian economies and put the resilience of the regional finance sector at risk. By working on a multi-stakeholder basis alongside other science-based Knowledge Partners, we can facilitate an orderly transition to economies that deliver wellbeing to all people whilst protecting the natural capital on which all businesses and societies depend,” said Jeanne Stampe, the head of WWF’s Asia Sustainable Finance team and founder of ASFI.
which will act as both a Knowledge Partner and Secretariat to the initiative.
Under ASFI, a number of organisations – each at the leading edge in their field of sustainability or sustainable finance – will collaborate as Knowledge Partners to bring unique and innovative perspectives and capabilities to the initiative. WWF will act as both a Knowledge Partner and Secretariat to the initiative. Importantly, ASFI’s Knowledge Partners are creating the latest tools, research, and frameworks for sustainable finance, and will support financial institutions in the practical applications of these. In this way, ASFI can support financial institutions in delivering their commitments under global initiatives such as Principles for Responsible Investment (PRI), Principles for Responsible Banking (PRB), Principles for Sustainable Insurance (PSI), Science Based Targets (SBT) and the Taskforce for Climate Related Financial Disclosures (TCFD).
To ensure ASFI’s work streams remain relevant and are aligned with industry priorities and developments, the initiative will also call on strategic guidance from its Advisory Group – the Association of Banks in Singapore (ABS), Institute of Banking and Finance (IBF), Investment Management Association Singapore (IMAS), Life Insurance Association (LIA), and the Singapore Exchange Regulation Pte. Ltd. (SGX).
ASFI will build on the strides that have been made thus far in developing an ecosystem for sustainable finance in Asia. In Singapore, these include the introduction of banking sector Guidelines on Responsible Financing, SGX sustainability reporting listing requirements for companies, the announcement of MAS’ Green Bonds Scheme and its role as founding member of the Network of Central Banks and Supervisors for Greening the Financial System, and ongoing capacity building support by industry associations for their members.
“ASFI’s Knowledge Partners look forward to working with financial institutions to further drive sustainable finance regionally and to co-creating practical and impactful solutions that will define the resilient, thriving economies of tomorrow,” added WWF’s Jeanne Stampe.