Industry Taskforce Consults on Second Version of Green and Transition Taxonomy

Singapore, 12 May 2022… The Green Finance Industry Taskforce (GFIT)¹, convened by the Monetary Authority of Singapore, today published for public consultation detailed thresholds and criteria for economic activities in the energy, transport, and real estate sectors. This builds on GFIT's earlier proposed taxonomy in January 2021². It also incorporates a user guide for financial institutions and companies to apply the taxonomy.

2. The three sectors covered under this second version are part of the eight focus sectors³ that collectively account for close to 90% of ASEAN greenhouse gas emissions. The proposed thresholds and criteria can be used to classify an economic activity as green, amber, or red, using a traffic light system, to differentiate its contribution to climate change mitigation.

1. A green classification represents activities that contribute substantially to climate change mitigation by operating at net zero, or are on a pathway to net zero by 2050.
   
   
2. An amber classification represents transition, and includes activities that are either transitioning towards green within a certain time frame, or facilitating significant emissions reductions in the short term.
   
   
3. A red classification refers to harmful activities that are not currently compatible with a net zero trajectory.

3. The user guide which accompanies the taxonomy includes detailed guidance on the reporting of a company's revenue, capital expenditures and operating expenditures that are aligned with the taxonomy criteria. GFIT aims to release the criteria and thresholds for the remaining five sectors for public consultation in late 2022, and finalise the full taxonomy in 2023.

4. Interested parties may submit their feedback on the second version of the taxonomy through the Association of Banks in Singapore (https://abs.org.sg/industry-guidelines/gfit-taxonomy-public-consultation) by 23 June 2022.