The Monetary Authority of Singapore (MAS) has said that they will be investing US$1.8 billion, which is equivalent to around SGD$2.4 billion, into climate-related investment opportunities in the near future. 

Related: Earth Day 2021: 6 Easy Ways to Be a Greener Traveller Today

This money will be placed with five asset managers under its Green Investments Programme (GIP) and will “manage new equity and fixed income mandates focused on climate change and the environment”, according to MAS. 

MAS made this announcement at the launch of the bank's first sustainability report this week. They are the first bank in Asia and the second in the world to publish this kind of standalone sustainability report. The GIP is just one of the many initiatives that they mention in this report. 

"The GIP will help to enhance the climate resilience of the official foreign reserves, attract sustainability-focused asset managers to Singapore and catalyse funding towards environmentally sustainable projects in Asia and beyond," said Ravi Menon, managing director of MAS.

With this money, the asset managers will establish regional sustainability hubs in Singapore and will then launch funds that will be focused on environmental, social and corporate governance (ESG).

Related: Earth Day 2021: 4 Easy Tips on Recycling in Singapore

They will also be building capabilities in green finance through organised training programmes and will conduct in-depth research into ESG and green financial technology efforts.

At the press conference, Mr Menon said, "climate change poses a significant threat to the financial sector. Finance is key to unlocking a sustainable future. It can support the transition to a less carbon-intensive economy by channelling capital to green technologies and infrastructure".

One of the many strategies that MAS will be adopting is integrating climate risks and opportunities into its investment framework.

“We aim to reduce risks to the portfolio across different climate scenarios, seize investment opportunities from the transition to a lower-carbon future and support the transition of portfolio companies,” Mr Menon said.

To do this, MAS chose to partner with GIC, a wealth fund, as well as to engage industry consultants to conduct a climate scenario analysis on its portfolio over a 20-year period. 

Related: Are Grapes the New Sustainable Alternative to Leather?

“In building a climate-resilient reserves portfolio, we need to develop a spectrum of actions to improve the resilience of our portfolio to climate risks while creating positive influence on the overall sustainability of companies in the real economy,” the MAS report read.

Additionally, MAS will be allocating more funds to climate-related opportunities and will support the greening of the economy through initiatives such as the GIP. In order to remain accountable, MAS has said that they will report its progress every year. 

It is also developing an analytic system that will help it to continuously assess the level of climate risk exposure in its portfolio.

“As a first step, we are disclosing the weighted average carbon intensity (WACI) of our equities portfolio, relative to market benchmarks,” Mr Menon said. He added that they will continue to monitor MAS' portfolio during this time. 

However, MAS is not only investing in the environment financially. They are also going to attempt to reduce their own carbon and environmental footprint. 

The report MAS published showed that their carbon emissions had nearly halved in the 2020/21 financial year. Of course, the report acknowledged that this was also due in part to the Covid-19 pandemic which halted business air travel.

MAS has also pledged that it will continue to track its usage of electricity, water and paper and that it will be taking actions to reduce the environmental impact of its currency operations where they are able to do so.

Related: How Much Environmental Savings Do We Gain From Eating Plant-Based Meats?