Singapore to include phase-out of coal in green finance taxonomy

The Singapore Asia Taxonomy is being drafted to help Singapore’s financial sector to identify green investments to reach their net-zero goals faster, according to the report.

The proposed taxonomy is being drafted by the Green Finance Industry Taskforce (GFIT), which is an industry-led initiative convened by MAS to speed up the development of green finance in Singapore. The taxonomy will be designed to be aligned with those used in Europe and China.

Bryan Chapman of Pinsent Masons MPillay, the Singapore joint law venture between Mpillay and Pinsent Masons, said: “The announcement of the Singapore Asia Taxonomy by MAS is yet another practical step taken by Singapore in its efforts to affect the decarbonisation of its energy sources, a goal of the country as highlighted by joining the Powering Past Coal Alliance at COP26.”

“Providing clearly defined criteria of what is to be considered ‘green’ or ‘transitioning towards green’ will be a welcome sight to financial institutions and other interested stakeholders,” he said.

Singapore’s GFIT began its final consultation period to finalise the taxonomy in February. It focuses on five sectors: agriculture and forestry, industrial, waste and water, information and communications technology, and carbon capture and sequestration.

The taxonomy proposes ‘Do No Significant Harm’ (DNSH) criteria, which states that activities that make a significant contribution to the mitigation of climate change should be carried out without causing significant adverse effects on the other four environmental objectives of the classification.