Second Green Finance Industry Taskforce (GFIT) Taxonomy Public Consultation
The Green Swan Initiative’s Response to the Second Green Finance Industry Taskforce (GFIT) Taxonomy Public Consultation on Identifying a Green Taxonomy and Relevant Standards for Singapore and ASEAN
In May 2022, the Green Industry Task Force (GFIT) released its second public consultation on a green taxonomy for Singapore's financial industry. A green taxonomy is a policy tool that categorises economic activities according to their alignment with sustainability objectives. In doing so, a green taxonomy facilitates the use of financial instruments by financial actors with “green", “sustainable", or ESG labels. GFIT is an industry-led initiative convened by the Monetary Authority of Singapore to accelerate the development of green finance in Singapore. This second consultation builds on from the first consultation, released in January 2021, which set out a “traffic light" system, setting out a framework which categorises activities as sustainable (green) or unsustainable (red), but incorporating an intermediate category for transition activities that are not aligned with sustainability targets, but may help to facilitate sustainable activities (amber).
This second consultation also follows the announcement in February 2022 by the Singapore government that it would reach net zero emissions “by or around 2050". Accordingly, the second consultation incorporates a clear net zero target in the thresholds it sets out for green in the traffic light framework. Its consultation paper requested, amongst other things, feedback on the traffic light approach and on relevant metrics and thresholds in the energy, transport and buildings sectors, the first three of eight sectors to come under the taxonomy.
In GSI's response, the alignment of the taxonomy with net zero targets were welcomed, while the introduction of short-term targets in the three sectors to better promote the achievement of the long-term net zero targets were proposed. Read our response here: download PDF.