Sustainable and Green Finance Institute Sustainability Summit - Ms Grace Fu

1. A very good morning to everyone.

2. 2025 is a pivotal year in the fight against climate change.

3. Last year, we witnessed the warmest year on record—1.5 degrees Celsius above pre-industrial levels. Yet, despite this stark warning, global momentum is wavering.

4. Geopolitical tensions are rising. Some governments are shifting focus to more immediate political concerns. Even some companies and financial institutions are re-evaluating their sustainability commitments, influenced by these shifting priorities.

5. At the same time, the world is grappling with the challenges of the energy transition. While the momentum toward renewable energy is strong, the reality is that fossil fuels still play a significant role—especially in industries and regions that lack the infrastructure for greener alternatives.

6. These are complex challenges. But they are not insurmountable.

Four Key Enablers

7. Today, I want to share four key enablers that can help sustain our transition to a greener economy: Capital. Standards. Policies. Knowledge. Let me elaborate.

Capital – Unlocking Finance for Decarbonisation

8. First, capital.

9. Transitioning to net zero is not just about ambition—it requires investment. A McKinsey study estimates we need US$9.2 trillion per year to get there by 2050. Today, we are over 35 per cent short of that target.

10. This means we must be creative in mobilising diverse financing mechanisms to unlock new sources of capital and maximise impact.

11. One such tool is blended finance, which combines public and private capital to fund projects that would otherwise struggle to secure investment.

12. At COP-29, countries agreed to triple public financing to developing nations—from US$100 billion to US$300 billion annually by 2035. Yet, even this is not enough. Public and philanthropic funding alone cannot close the gap. But if used strategically, it can de-risk green projects, attract private investment, and accelerate transition efforts.

13. Singapore is leading by example. Our Financing Asia’s Transition Partnership (FAST-P) has pledged up to US$500 million to catalyse additional capital from public, private, and philanthropic sources. With the right partners, we could build a US$1 billion fund—targeting high-impact sectors like energy transition, coal phase-out, and hard-to-abate industries such as steel, cement, and aviation.

14. Another innovative approach is carbon credits. High-quality carbon credits direct financing toward emission-reduction projects that would otherwise not have been viable. They also offer an alternative pathway for companies to address hard-to-abate emissions.

15. In Singapore, we are piloting transition credits to accelerate the retirement of coal-fired power plants. Through the Transition Credits Coalition (TRACTION), we are working with financial institutions, insurers, and industry experts to unlock new financing solutions. Already, two pilot projects in the Philippines are exploring how to make this model work.

Standards – Building a Trusted and Transparent System

16. Second, standards.

17. For the green transition to be effective, we need clear, credible, and harmonised standards.

18. Today, businesses and investors navigate a patchwork of sustainability reporting requirements, leading to confusion and inefficiencies. We must aim for greater interoperability across regions and sectors, reducing compliance burdens and ensuring that capital is directed to truly sustainable projects.

19. Singapore has taken a step forward with the Singapore-Asia Taxonomy for Sustainable Finance. This framework provides a common language for evaluating green and transition activities, ensuring science-based criteria guide investment decisions.

20. To enhance global alignment, MAS has also mapped this taxonomy to the EU Taxonomy and China’s Green Bond Endorsed Project Catalogue, under the International Platform for Sustainable Finance’s Multi-Jurisdiction Common Ground Taxonomy (M-CGT). This integration enhances cross-border financing opportunities and strengthens the credibility of sustainable investments.

Policies – Providing Clear Signals for Transition

21. Third, policies.

22. Regulatory clarity is critical. Governments must signal their commitment to decarbonisation through robust Nationally Determined Contributions (NDCs) and supporting policies.

23. Just last month, Singapore announced our 2035 NDC—a commitment to reduce national emissions to between 45 to 50 million tonnes of CO₂ equivalent by 2035. This aligns with our net zero target by 2050 and demonstrates our unwavering commitment to sustainability, even as global momentum slows.

24. But ambition must be balanced with pragmatism. The pace of decarbonisation depends on international collaboration and technological advancements. That is why Singapore is leveraging Article 6 of the Paris Agreement, which allows countries to cooperate on carbon markets.

25. We have signed three Implementation Agreements under Article 6—with Papua New Guinea, Ghana, and Bhutan—facilitating international financing through high-quality carbon credits. To catalyse demand, Singapore’s International Carbon Credit (ICC) Framework allows companies to offset up to 5 per cent of their carbon tax liability with these credits.

26. The reason why we have implementation with these three countries, they were selected because they have very clear policies and frameworks that are enshrined in their laws. That's a very important prerequisite for companies, investors, project developers, to invest their time and resources to develop projects in their jurisdiction. Without those clear laws, it is difficult to generate high quality carbon credit projects that will sustain time and have the longevity that investors require. ‎ 

Knowledge – Driving Innovation and Expertise

27. Finally, knowledge.

28. Knowledge ties together capital, standards, and policies, forming the foundation for effective climate action.

29. Singapore is well-positioned to be a knowledge hub for sustainable finance. Our financial sector, academic institutions, and professional services form a growing ecosystem of expertise in climate finance.

30. Institutions like SGFIN play a crucial role in this landscape. I encourage you to collaborate, share insights, and drive innovation to advance climate resilience in the region.

31. Beyond financing, we must also explore how capital markets can help address climate risks.

32. For example, insurance solutions could play a bigger role in optimising capital allocation and managing risk. Parametric insurance could address revenue volatility in solar and wind power projects, while similar financial instruments could be developed for carbon credits and emerging technologies like carbon capture and storage.

Conclusion – Working Together for a Sustainable Future

33. Let me conclude.

34. The challenges before us—geopolitical uncertainty, economic pressures, and environmental risks—may seem daunting. But they should not discourage us.
    

35. Instead, they should drive us to act with greater urgency and purpose.

36. I have outlined four key enablers:

    1. Capital – To finance the transition.

    2. Standards – To build credibility and trust.

    3. Policies – To provide clear, long-term signals.

    4. Knowledge – To innovate and scale solutions.

37. By working together, we can create the right conditions for capital to flow, unlock new opportunities for businesses, and accelerate climate action. Climate action is not against businesses. They are aligned. We are all aligned here to make the planet better so that we can have sustainable prosperity, progress, economic progress and urban development. All this is not sustainable if we don't look after our planet. ‎

38. Let us commit to this journey—towards a more resilient, sustainable, and prosperous future for generations to come.
    

39. Thank you.