Skills development a key focus of new Singapore Sustainable Finance Association

Through the SSFA, Singapore aims to deepen cross-sector collaboration, which includes studying the impact of sustainability on the country's financial sector workforce.

Singapore recently launched the Singapore Sustainable Finance Association (SSFA), said to be the first cross-sectoral industry body to support the development of Singapore as a leading global centre for sustainable finance.

Over the past 10 years, Singapore has taken steps in sustainable finance, including:  

• the Guidelines for Responsible Financing, launched by the Association of Banks in Singapore in 2015
• the first issuance of a green bond by City Developments Limited in 2017. This was followed by DBS.
• the Green Finance Action Plan, launched by MAS in 2019.

More recently, it refreshed the plan last year, with the Finance for Net Zero Action Plan, expanding its focus beyond pure green to include transition finance. 

As Chia Der Jiun, Managing Director, Monetary Authority of Singapore, affirmed at the launch: "Today, Singapore is one of the leading sustainable finance centres serving the net zero transition needs in Asia and beyond."

Singapore is also one of ASEAN’s largest markets for green, social, sustainability and sustainability-linked bonds and loans; over S$30bn worth of such bonds and loans originated from Singapore in 2022. The nation is also home to a vibrant sustainable finance research and talent development ecosystem, comprising centres of excellence in universities, reputable training providers, and over 20 APAC sustainability hubs established by financial institutions.

All together, these capabilities and initiatives serve as a good foundation to build on, to better serve the needs of the region in the transition to net zero, Chia stated. Moving forward, Singapore is looking to strengthen its contributions on three fronts – standards, solutions and skills.

Standards

Clarity and credibility in standards are foundational to a trusted sustainable finance centre as they help mitigate the risk of greenwashing. It also provides greater confidence for capital to be channelled to legitimate green and transition activities.

In recognition of this, Singapore is also working with international organisations such as the International Energy Agency to develop sectoral pathways that are contextualised to circumstances faced in Asia. With clearer science-based and region-contextualised sectoral decarbonisation pathways, financial institutions will be given an avenue to develop strategies to capitalise on the financing opportunities.

Solutions

In mobilising private capital for the net zero transition, Singapore is looking adopt innovative financing approaches to tackle marginally bankable or currently un-bankable projects.

"Blended finance is key to scale the financing needed for marginally bankable projects and solutions. Together with our partners, we announced a blended finance initiative called Financing Asia’s Transition Partnership, to scale the financing for green and transition infrastructure and technologies in the region," Chia said.

Another tool to unlock finance lies in the carbon market. Here, MAS is piloting the concept of transition credits to accelerate the early retirement of coal plants in Asia. Singapore launched the Transition Credits Coalition and two pilot projects last month to explore the unlocks needed for this potential financing avenue to complement other regional financing initiatives.

Skills

Singapore is looking to invest in the skills and capabilities of its people and organisations, for a deep pool of skilled and adaptable talent.

Through the SSFA, Singapore aims to deepen cross-sector collaboration. One such example would be the Jobs Transformation Map by the MAS, the Institute of Banking and Finance (IBF) and Workforce Singapore, to study the impact of sustainability on our financial sector workforce.

Preliminary findings suggest that most of the jobs must be augmented by upskilling to support changes in regulations, products, and processes to better serve their clients. In addition, new and highly specialised roles such as sustainability risk analysts, will be created. Detailed findings, and key initiatives by the MAS and IBF to support the sector’s upskilling, will be shared in April.

"To make a difference through standards, solutions and skills, the financial sector and industry will need to come together to collaborate and leverage the deep expertise that resides in each domain."

The newly launched Singapore Sustainable Finance Association (SSFA) will be a key platform to achieve this.

• In setting standards: SSFA can lead in developing industry best practices in areas such as carbon credits trading and transition finance. This plays a crucial role in channelling the industry’s perspectives as standards continue to evolve.
• In driving innovative solutions: SSFA can bring together financial institutions and industry sectors to identify more integrated approaches to address barriers in scaling the financing needed.
• In developing skills: SSFA can contribute to upskilling and capacity building initiatives by guiding the relevance of sustainable finance courses. This includes training courses offered by Institutes of Higher Learning (IHLs) and other training providers. In tandem, SSFA can also promote the take-up of IBF’s skills certification schemes, and organise capacity building workshops in areas not readily offered by the training providers.

As Chia concluded: "Sustainable finance is a key thrust of Singapore’s development as a leading international financial centre. We have made a good start and are on a promising trajectory.

"Let us continue to strengthen partnerships across the financial sector and with industry to support the region’s low-carbon transition. The SSFA will be instrumental in coordinating this."

Lead image / 123rf