MAS Launches World's First Multi-Sector Transition Taxonomy in Collaboration with Singapore-Asia for Sustainable Finance

The Monetary Authority of Singapore (MAS) unveils the Singapore-Asia Taxonomy for Sustainable Finance, laying out specific criteria for green and transition activities in eight key sectors. Emphasizing the importance of defining transition in the Asian context, MAS introduces a novel 'transition' category to address net-zero goals alongside economic expansion and increased energy consumption.

The taxonomy employs a traffic light system and 'measures-based approach' to categorize operations within green, transitional, and ineligible parameters. It sets transition thresholds with finite durations, acknowledging the challenges in certain industries and promoting credible transition efforts, such as in the maritime and energy sectors.

The taxonomy aligns with global initiatives like the Common Ground Taxonomy, facilitating interoperability. MAS collaborates with the People Bank of China and the Singapore-China Green Finance Taskforce to enhance international financial flows. MAS Managing Director Ravi Menon highlights the taxonomy's significance in providing reliable definitions for transition activities and guiding funds allocation to regional green projects.

The Singapore-Asia Taxonomy, developed with industry involvement and regular updates, positions Singapore as a leader in sustainable finance, influencing other regional taxonomies and supporting the transition of challenging sectors in Asia.