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How adopting the Singapore Asia Taxonomy can advance a greener future 

Practical strategies for financial services and corporates to harmonize disclosures and power growth 


In brief
  • With the Singapore Asia Taxonomy, institutions can achieve portfolio alignment with net-zero goals, fostering transparency in sustainability reporting.

  • The framework can strengthen institutions’ green credentials and facilitate access to financing for sustainable projects.

  • Institutions need to integrate the Singapore Asia Taxonomy (SAT) into their financial and risk management strategies by mapping their activities against the taxonomy. 


The Singapore Asia Taxonomy (SAT) is set to transform sustainable finance in Asia. With the SAT, financial institutions (FIs) and corporations can robustly assess and report on the environmental impact of their investments and operations, attracting investment and helping transform the economy. 

Following release last December, implementation of the SAT is gathering momentum. Financial institutions, including banks, fund managers, private equity firms, and insurers, have begun to explore the use of the SAT to align their portfolios with net-zero targets and develop green financial products. As a result, we expect to see FIs in our region enhance their environmental risk management, while meeting the growing demand for sustainable investment options. Corporations will also benefit by showing their commitment to net-zero goals.

Our report, Unveiling the potential: How the Singapore Asia Taxonomy empowers financial institutions and corporates in sustainable finance, seeks to demystify the SAT's framework and encourage its rapid take-up for Singapore. It is relevant for financial institutions, corporates, policymakers and for all stakeholders invested in a sustainable future for Asia.

The report is broken into five key sections:

  1. Introduction to Singapore Asia Taxonomy: explains the standardized framework established by the SAT for classifying economic activities based on their environmental impact.
  2. Powering sustainable finance for FIs: discusses the role of SAT in achieving portfolio alignment with net-zero goals, enhancing environmental risk management, fostering green innovation through product development, and promoting consistent and transparent sustainability reporting to manage greenwashing risks.
  3. Corporates go green — The SAT advantage:  highlights the benefits of the SAT framework in facilitating lower costs and favorable funding for corporations that align their activities with sustainable practices. By leveraging the SAT, corporations can enhance their environmental responsibility efforts and attract sustainability-focused investors.
  4. Putting theory into practice — SAT in action: provides practical examples of how the SAT can be implemented by institutions. Included case studies demonstrate the effectiveness of the SAT in guiding sustainable finance practices and illustrate how the SAT framework can be applied to various sectors and activities.
  5. Charting the course to a sustainable future: highlights the importance of continued collaboration among financial institutions, corporations, and policymakers to achieve a low-carbon economy and calls for ongoing commitment to sustainability, innovation, and transparency to ensure a prosperous and environmentally responsible future for the region.

How the Singapore Asia Taxonomy empowers financial institutions and corporates in sustainable finance

Summary

As the financial sector plays an increasingly crucial role in addressing climate change, the SAT stands as a powerful tool to drive positive change and chart a course toward a sustainable future for the region and beyond.

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