MAS, PBOC to deepen collaboration in green and transition finance

[SINGAPORE] The central banks of Singapore and China reaffirmed their commitment to push on with their cooperation in green and transition finance.

At the third Singapore-China Green Finance Taskforce (GFTF) meeting, the Monetary Authority of Singapore (MAS) and People’s Bank of China (PBOC) strengthened their partnership to advance taxonomy interoperability, MAS said on Friday (Jul 11).

This refers to the ability of different classification systems – taxonomies – to work together, allowing for the seamless exchange and utilisation of information across various platforms and applications.

In sustainable finance, taxonomy interoperability is critical for enabling financial institutions to identify and classify green and transition activities.

Last November, the MAS, PBOC and European Union Directorate-General for Financial Stability, Financial Services and Capital Markets Union launched the Multi-Jurisdiction Common Ground Taxonomy (M-CGT) – it contains 110 economic activities across eight sectors taken from the EU, China and Singapore taxonomies that could be eligible for green financing.

Building on this, OCBC Bank (China) arranged China’s first M-CGT-aligned green syndicated loan to Shudao Financial Leasing (Shenzhen) last month, noted MAS.

“This transaction demonstrates (the) growing market adoption of the M-CGT,” it added.

Facilitating green financing

In addition, investment bank China International Capital Corp will continue to work with the Singapore Exchange on facilitating green financing flows through the Green Corridor. This initiative was launched at last year’s GFTF to encourage greater green financing flows between Singapore and China, focusing on the issuance of green panda bonds – sustainable debt denominated in the Chinese currency – as a start.

Held in Singapore for the first time, the recent GFTF meeting brought more than 40 public and private-sector participants to discuss joint initiatives in sustainable finance.

MAS said that marketing roadshows have generated interest from Singapore-based issuers to explore the issuance of green panda bonds, and to align their debt financing with the M-CGT.

The meeting also discussed potential areas of cooperation in biodiversity and nature financing, as well as opportunities in Shanghai’s green finance development.

“The GFTF has developed into an important platform for both public-sector and industry experts from Singapore and China to collaborate and work hand-in-hand to shape bold and impactful initiatives,” said Gillian Tan, chief sustainability officer of MAS.