The Green Finance Industry Taskforce (“GFIT“) proposed a Singapore Taxonomy for Singapore-based financial institutions (“FIs“) with the key objective of encouraging more capital flows towards sustainable activities (“GFIT Taxonomy“). In GFIT’s first consultation paper issued in January 2021, GFIT consulted on the broad principles and approach for the GFIT Taxonomy (“2021 Consultation Paper”). GFIT introduced a traffic light approach to classify an economic activity as green, amber, or red, to differentiate an activity’s contribution to one or more of the environmental objectives proposed by GFIT. The 2021 Consultation Paper also sought the views of FIs on, among other things, whether the GFIT Taxonomy would impose additional cost and compliance burden for them and whether businesses could cope with the disclosure requirements required under the GFIT Taxonomy.
Following broad-based support for a Singapore Taxonomy, GFIT is now consulting on the second version of the GFIT Taxonomy that has incorporated feedback received on the 2021 Consultation Paper and considered other significant developments in the sustainability space. The second version of the GFIT Taxonomy is set out in GFIT’s second consultation paper issued on 12 May 2022 (“2022 Consultation Paper“).
This Update provides an overview of the key proposals being consulted on in the 2022 Consultation Paper and highlights the new/revised aspects in the second version of the GFIT Taxonomy.
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