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INTRODUCTION
1. First of all, thank you to 新浪财经 for inviting SGX Group to this China Carbon Neutral Summit, to share our thoughts and role, in the global race to net zero.
2. Countries representing 80% of global GDP have committed to net zero targets. It is estimated that financing the transition to net zero requires an estimated US$100 to US$150 trillion over the next three decades. China’s efforts to reach net-zero emissions by 2060 will require trillions of dollars to be invested in green and low-carbon industries. What this means is that we will see a significant shift in sustainable development and financing in the coming years.
3. The financial industry has an important role to play in this global journey towards net zero. Exchanges like SGX Group, being at the centre of the market ecosystem, are in a unique position to facilitate capital flows towards sustainable finance, as well as educate and influence the ecosystem’s move towards decarbonisation.
4. Sustainability efforts in Asia have come a long way in recent years, with policymakers, corporates, investors and many other stakeholders responding to the call for action. However, while there has been progress, the region, which accounts for half of the world’s emissions, still has a lot of work to do to meet its net zero goals.
5. The transition to net zero is a collective journey.
6. 实 现 碳 达 峰 和 碳 中 和，人 人 有 责。
7. For SGX Group, we strive to lead by example, and very importantly, collaborate and work with partners and stakeholders in our ecosystems.
SGX GROUP’S MULTI-FACETED ROLE IN THE NET ZERO JOURNEY
8. As an organisation, SGX Group is committed to net zero. We were the first Asian exchange to set science-based emissions reduction targets that are consistent with keeping global warming to 1.5°C above pre-industrial levels.
9. From a business perspective, SGX Group, as a multi-asset exchange, helps to mobilise capital towards decarbonisation efforts. Massive investments are required to reduce emissions, decarbonise processes and develop low-carbon businesses. In this regard, we play a key role in supporting regional and international companies and issuers in their fundraising efforts.
10. At the same time, investors today also want to combine financial returns with a positive contribution to the environment. We have been integrating sustainability into our products and solutions, helping investors to decarbonise their investment portfolios and to seek new sustainability-linked investment opportunities.
11. In the fixed income space, for example, we have experienced tremendous growth in green and sustainable bonds. SGX Group has, to-date, listed more than 340 international ESG bonds with over S$190 billion raised, and nearly 20% of these ESG bond issuers come from Greater China.
12. On this note, I am pleased to share that SGX Group is currently working with several China partners to develop Greennode RMB, the first bilingual ESG bond data platform focusing on China onshore ESG bonds. At launch, this platform will host the issuer framework, bond allocation and impact data for more than 120 bonds and issuers. The platform will be rolled out very soon, and we believe it will support investor flows into China’s onshore green and sustainable bond market.
13. In the last six months, we also welcomed the listings of several sustainability-linked ETFs, including a green REIT ETF. Global assets under management (AUM) for sustainability-linked ETFs listed on SGX have jumped 90% during this period – a clear sign that investors are increasingly shifting their investments towards sustainable portfolios.
14. Our index provider subsidiary, Scientific Beta, has also launched Climate Impact Consistent Indices – a series of pure climate indices that translates companies’ climate performance and alignment engagement into portfolio decisions, allowing investors to promote real-world emissions reductions.
15. With countries, including China, transiting to renewable and low-carbon energy sources, the market and pricing dynamics of raw materials will evolve. Hence, SGX Group is also developing risk management tools for new energy metals, that will be critical to market participants and traders in this green energy transition.
16. Even as companies seek to reduce their carbon emissions, there will be hard-to-abate emissions which companies will seek to offset using carbon credits. Well-functioning carbon markets are essential in our ecosystem’s transition to net zero. We have thus joined hands with DBS, Standard Chartered and Temasek, to launch Climate Impact X, or CIX in short, a global marketplace for high-quality carbon credits.
17. Leveraging on satellite monitoring, machine learning and blockchain to enhance the transparency, integrity and quality of carbon credits, CIX offers companies big and small, the ability to efficiently source and fund verified projects globally that deliver genuine, positive impact to the environment.
THE ROLE OF DATA IN THE TRANSITION TO NET ZERO
18. I would now like to touch on the role of data in the transition to net zero. As investors are increasingly using ESG data in their investment processes, it is important for this data to be readily available and comparable. As companies improve their ESG disclosures, they also require a platform for them to easily report and disclose this data.
19. With this end in mind, SGX is developing a ESG data portal, with the support of the Monetary Authority of Singapore. This ESG portal will allow investors to access ESG data in a structured format, as reported by issuers, in accordance with aligned metrics and disclosure requirements. The objective is to make ESG data more accessible and comparable for investors, as well as save costs and improve data transparency for issuers. Ultimately, we hope to simplify decision-making for investors and disclosure-reporting for issuers.
COLLABORATION FOR GREATER GOOD
20. To make a scalable impact in climate change, I strongly believe the ecosystem needs to work together. There are many initiatives out there, on country, regional and global levels, led by private and public sectors and alliances, charting towards the same direction and goals. What will make these even more impactful, is better collaboration and coordination.
21. One of the initiatives that SGX Group has embarked on is taking a pro-active role in the Glasgow Financial Alliance for Net Zero, or GFANZ in short. GFANZ members comprise financial institutions who are committed to accelerate the net-zero agenda and define best practices for the future.
22. We are supporting GFANZ by hosting its APAC Network Central office at our headquarters. We hope that through this APAC network, we can support engagements with financial institutions and policymakers across the region, and promote mutual knowledge-sharing and open dialogue, so that the transition is inclusive and applicable to all.
CONCLUSION
23. To enable the further development of green and sustainable markets, there is an urgent need for multiple stakeholders to work together to enhance policies, regulation, data, taxonomy and use of technology, among others.
24. Asia is diverse, and industries and companies are at different stages of their sustainability journey. We cannot adopt a one-size-fits-all approach. The challenge is how do we facilitate Asia’s holistic transition to a more sustainable future, and at the same time, balance the region’s diverse environmental, social and economic considerations.
25. Exchanging insights and discussions at platforms such as Sina Finance’s Carbon Neutral Summit today are an important part of our collective transition journey. SGX Group is open to collaborations and looks forward to the opportunity to work with partners in China to accelerate the transition to net zero. Thank you once again to the organiser for inviting me, and I wish all of you a fruitful conference.
