CFA Society Singapore Investment Gala Dinner 2024 - Dr Koh Poh Koon

Speech by Dr Koh Poh Koon, Senior Minister of State for Sustainability and the Environment, at the CFA Society Singapore Investment Gala Dinner 2024

Mr Simon Ng, President, CFA Society Singapore,
Distinguished guests,
Ladies and gentlemen,

1 Good evening. My thanks to CFA Society Singapore for the invitation to speak at this year’s Investment Gala Dinner.

2 Tonight’s theme is “Turning the tide on climate finance”. Internationally, we have seen positive momentum building for climate action and finance. At COP28, we saw the operationalisation of the loss and damage fund, the mobilisation of over US$85 billion for climate action, and conclusion of the inaugural Global Stocktake.

3 Though the world has made some progress on climate action, we need to accelerate implementation of the Paris Agreement. The Global Stocktake emphasised the need for more urgent and decisive climate action within this critical decade to keep our 1.5ºC goal within reach. It geared towards moving the international community from broad-based net zero targets to definitive steps towards the implementation of transition pathways and climate mitigation. Parties agreed to transition away from fossil fuels in our energy systems, triple renewable energy capacity globally, and double energy efficiency improvements globally by 2030. Parties also agreed to accelerate zero and low-emission technologies, such as renewables, nuclear and low-carbon hydrogen production.

Singapore’s Commitment

4 As a member of the global community, Singapore will do our part for climate action. Singapore is alternative-energy disadvantaged – our urban density and limited land area, relatively flat land, low wind speeds and lack of high-quality hydrothermal resources present serious difficulties in pursuing alternative energy options. Despite these challenges, we have raised our national climate target to achieve net zero emissions by 2050.

5 Currently, about 95 per cent of our electricity is generated from natural gas. We are investing significant resources to transition our energy system towards even cleaner energy. At this year’s Budget, we announced that a Future Energy Fund will be set up with an initial injection of S$5 billion to spur Singapore’s transition to cleaner fuels. This will position us well to move with speed on critical infrastructure and enhance our security in clean energy. One promising source of low-carbon energy is hydrogen, and we launched our National Hydrogen Strategy in 2022 to provide a roadmap of the steps we will be taking to prepare Singapore for a hydrogen future.

6 Alongside these efforts, we aim to import up to 4 gigawatts (GW) of low-carbon electricity by 2035, making up around 30% of Singapore’s electricity supply then. So far, our Energy Market Authority has granted conditional approvals for 1 GW from Cambodia, 2 GW from Indonesia and 1.2 GW from Vietnam.

7 Our carbon tax underpins our net zero targets and climate mitigation efforts by providing an economic signal to steer businesses and consumers away from carbon-intensive goods and services, and enhance the business case for the development of low-carbon solutions. This year, we have raised the carbon tax from $5 per tonne to $25 per tonne. We will raise it to $45 in 2026, and eventually to between $50 and $80 by 2030.

Opportunities

Green jobs and training

8 As companies, sectors, and economies transition, new green jobs will be created, and there will be transformation for jobs in many sectors. The International Labour Organisation estimates that there will be 14.2 million net green jobs in Asia Pacific by 2030. Thus, our workers need to be empowered with the skills and capabilities to thrive in the green economy. We convened the Green Skills Committee for this reason last year, bringing together industry players, training providers and other partners to ensure that training for green skills is able to keep pace with demand. The Committee is focusing on training in areas which will be in high demand in the immediate and near term, such as clean energy, sustainability reporting and assurance.

9 I am heartened by how private companies, trade associations and our institutes of higher learning have established several programmes and courses in collaboration with Government agencies. For example, the Energy Market Authority has been working with training providers to launch programmes to address clean energy skills gaps identified by the industry. Schneider Electric, in partnership with Enterprise Singapore, launched the SME Kickstarter Decarbonisation Programme in 2022, which equips participating SMEs with the necessary knowledge needed throughout their sustainability journeys, with a focus on decarbonisation.

10 For the financial services sector, the Sustainable Finance Jobs Transformation Map (JTM) study projected that the sustainable finance market in ASEAN over the next decade will amount to S$4 to 5 trillion. More than 50,000 professionals in the financial services sector will see new sustainable finance-related tasks added to their jobs to a moderate to high degree. A robust and skilled workforce will strengthen Singapore’s ability to seize the opportunities available. At the launch of the JTM last month, the Monetary Authority of Singapore (MAS) announced that it has set aside S$35 million to support upskilling and reskilling, and develop specialists in sustainable finance over the next three years. Other initiatives by MAS and the Institute of Banking and Finance Singapore (IBF) to upskill the financial services sector include expanding more undergraduate programmes and executive courses on sustainable finance, and introducing an IBF Skills Badge to recognise industry professionals’ acquisition of sustainable finance skills.

Financing Asia’s Transition

11 As a finance hub, Singapore is well-positioned to accelerate Asia’s transition to a low-carbon future.

12 At COP28, MAS launched the Financing Asia’s Transition Partnership (FAST-P). It is a blended finance initiative which aims to mobilise up to US$5 billion to de-risk and finance marginally bankable green and transition projects in Asia. Notably, this includes projects that are most pertinent in our region, from the managed phase-out of coal to the scaling of renewables and modernisation of grid systems.

13 MAS also launched the Transition Credits Coalition (TRACTION), bringing close to 30 partners to enhance the economic viability of retiring coal plants early using transition credits. This includes looking into building a supply of high-integrity transition credits, developing solutions to enhance the replicability of transition credit transactions, and building investor confidence in transition credits. Two ongoing pilot projects are estimated to bring forward the retirement of two coal plants by at least 5 years, translating to a reduction of more than 3 million tonnes of carbon emissions per year.

Ownership

14 Alongside these opportunities in the green economy, challenges remain. A key challenge businesses face is the increasing pressure to be more transparent about their strategies, risks, and opportunities related to climate change. This brings me to my next point, on the importance of ownership and climate reporting. By requiring companies to disclose data such as carbon emissions, we increase market transparency and empower businesses to take greater ownership of their sustainability performances. This data also allows consumers, investors and financiers to make more informed choices in their purchases and investments, encouraging financing flows to businesses with strong sustainability practices.

15 Singapore will require all listed issuers to make climate-related disclosures from FY2025, followed by large non-listed companies from FY2027. These disclosures will need to be aligned with the standards set out by the International Sustainability Standards Board.

16 To help our businesses meet their climate reporting needs, Minister Grace Fu announced the launch of the Emission Factors Registry by the Singapore Business Federation last month, with support from corporates like Singtel, PwC and the Government. The Registry will capture a database of emissions factors developed based on Singapore’s context. These emissions factors essentially act as conversion rates, converting operational data from activities into their corresponding greenhouse gas emissions. This will help our businesses track and report their emissions more easily and accurately, saving time and effort. In turn, it will empower them to make informed sustainability decisions based on their environmental impact.

Conclusion

17 To conclude, “Turning the tide on climate finance” will require significant international collaboration and commitment. Singapore is well positioned to play a leading role in mobilising climate finance. With our firm commitment to climate action, there are clear opportunities for Singapore and our businesses to thrive.

18 I look forward to the discussions later tonight. Thank you.