Parliamentary Speech: Budget Cut 2019

I am heartened that Budget 2019 acknowledges climate change as a strategic challenge for Singapore.

Mr Speaker, the financial sector’s role in allocating capital for a climate safe future across generations is a significant one that we must include in our strategic plan for climate change action.

As a leading financial hub, Singapore’s banking and asset management industry must rise to this challenge. How we lend is a reflection of our values and principles. For example, civil society recently called out our banks for continuing to fund coal-fired power. As of September 2018, 17 banks, including Standard Chartered, have committed to stop financing coal-fired power. The Governor of Bank of England is reported to be open to increased regulatory requirements for “brown” investments.

What regulatory and supervisory mechanisms are being developed so that banks in Singapore will:

actively implement existing green standards, like ABS’ Haze Diagnostic Kit, into their lending policy frameworks and,

proactively work with civil society and experts to identify other critical industries, like energy, where green standards should be developed and implemented?

Our asset management industry currently manages US$2.4 trillion. Can we allocate funds to support our asset management industry to develop stronger stewardship principles and use the tools available in the market to help us safeguard our future, one that is climate safe?

For example, The Government Pension Investment Fund of Japan allocates close to 10% of its investments into funds using sustainability indices. 2 pension funds in Korea have gone even further, and stepped away from future coal investments.

Response from Minister in charge of Monetary Authority of Singapore, Mr. Ong Ye Kung:

1. Lastly, Ms Anthea Ong asked about sustainable financing. MAS is committed to advance the agenda for sustainable finance. As a member of the Network for Greening the Financial System, MAS works closely with our international counterparts to develop best practices for financial institutions (FIs) to manage climate risks and opportunities. Let me outline MAS’ efforts in three key areas.

2. First, our local banks have implemented policies aligned with the Guidelines on Responsible Financing issued by the Association of Banks in Singapore, to evaluate their borrowers’ environmental, social and governance (ESG) risks, and help borrowers improve their sustainability profiles. In this regard, the local banks have also committed to stop new financing of inefficient coal plants. MAS also expects insurers to consider environmental risks in their risk assessments, and has introduced a climate scenario in our industry-wide stress tests.

3. Second, the financial industry is promoting green financing, such as green bonds. Over $2 billion of green bonds have been issued to date, following the introduction of the MAS Green Bond Grant Scheme. Recently, the Scheme was expanded to cover social and sustainability bonds.

4. Indeed, within the asset management sector, the large majority or 80% of sizeable asset managers in Singapore are signatories to the UN Principles for Responsible Investment, and take on board environmental, social and governance risks considerations in their investment processes. In MAS’ own investment portfolio, we have been actively working with our fund managers to ensure that ESG considerations are incorporated.

5. Finally, to strengthen the region’s financial resilience to disaster risks and address protection gaps, the Southeast Asia Disaster Risk Insurance Facility will be set up in Singapore this year as ASEAN’s first regional catastrophe risk pool. It will better cover emergency response costs in the aftermath of catastrophes. MAS will continue to work with key stakeholders in the financial industry to promote the sustainability agenda.

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Anthea Ong is a Nominated Member of Parliament. (A Nominated Member of Parliament (NMP) is a Member of the Parliament of Singapore who is appointed by the President. They are not affiliated to any political party and do not represent any constituency. There are currently nine NMPs in Parliament.)

The multi-sector perspective that comes from her ground immersion of 12 years in different capacities helps her translate single-sector issues and ideas across boundaries without alienating any particular community/group. As an entrepreneur and with many years in business leadership, it is innate in her to discuss social issues with the intent of finding solutions, or at least of exploring possibilities.

She champions mental health, diversity and inclusion, environment — and volunteerism in Parliament.

A full-time human, and part-time everything else.

A full-time human, and part-time everything else.