The Green Finance Industry Taskforce’s Taxonomy and environmental risk management handbook

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On January 2021, the Green Finance Industry Taskforce (GFIT), convened by the Monetary Authority of Singapore (MAS), issued a proposed taxonomy for Singapore-based financial institutions to identify activities that can be considered green or transitioning towards green. Compared to other taxonomies, a key feature of the proposed taxonomy is that it encompasses transition activities that allow for a progressive shift towards greater sustainability while taking into account starting positions and supporting inclusive economic and social development. GFIT issued a consultation paper that seeks feedback on GFIT’s recommendations on the environmental objectives, focus sectors, and a “traffic-light” system which sets out how activities can be classified as green, yellow (transition), or red according to their level of alignment with environmental objectives. 

GFIT also issued a handbook that offers guidance to banks, insurers, and asset managers on best practices in environmental risk management. It will support the financial industry’s efforts to implement MAS’ Guidelines on Environmental Risk Management.