The Green Finance Industry Taskforce (“GFIT“), convened by the Monetary Authority of Singapore, is conducting a public consultation to seek feedback on the appropriate taxonomy, a classification tool, to help Singapore-based financial institutions identify economic activities that are considered “green” or are transitioning into “greener” activities in sustainability financing. The proposals are set out in the GFIT consultation paper titled “Identifying a Green Taxonomy and Relevant Standards for Singapore and ASEAN”. The consultation closes on 11 March 2021.
In particular, GFIT is seeking comments on:
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- Whether there is a need for Singapore to have its own taxonomy;
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- The four environmental objectives for the taxonomy, namely: (1) climate change mitigation; (2) climate change adaptation; (3) protection of biodiversity; and (4) promotion of resource resilience;
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- The selection of the economic sectors that are covered by the taxonomy;
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- The proposed “traffic light” classification system for activities within the selected economic sectors by grouping them into three classifications, namely, “green” for activities that are clearly aligned with the environmental objectives of the taxonomy; “yellow” for activities with quantifiable and time-bound pathway towards either green or significant de-carbonisation that will contribute to the objectives of the taxonomy; and “red” for activities that are inconsistent with the environmental objectives of the taxonomy; and
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- The treatment of transition activities in the taxonomy.
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