24 May 2022

On 12 May 2022, the Green Finance Industry Taskforce (“GFIT”) published for public consultation a second version of a taxonomy for Singapore-based financial institutions to identify activities that can be considered green or transitioning towards green. The consultation closes on 23 June 2022.

Second version of taxonomy

Building on the first consultation in January 2021, GFIT proposes, in the second consultation, activity-level criteria and thresholds for three focus sectors (energy, transport, and buildings) for one of the environmental objectives (climate change mitigation). These three sectors are part of the eight focus sectors that collectively account for about 90 per cent. of ASEAN greenhouse gas emissions.

This consultation expands on the traffic light approach that was proposed in the first consultation paper and adds granularity to the application and thresholds for classification, supported by science and data. Under the traffic light approach, an economic activity may be classified as green, amber or red depending on its level of contribution to climate change mitigation:

  • Green: Represents activities that contribute substantially to climate change mitigation by operating at net zero, or are on a pathway to net zero by 2050. 
  • Amber: 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. 
  • Red: Refers to harmful activities that are not currently compatible with a net zero trajectory.

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.

Future developments

GFIT states that work on the activity-level criteria and thresholds for the remaining focus sectors, for the climate change mitigation environmental objective, is targeted to be released for consultation closer to end 2022. Subsequently, a final taxonomy document is targeted to be released for consultation in 2023.


GFIT, convened by the Monetary Authority of Singapore (“MAS”), is an industry-led initiative whose mandate is to help accelerate the development of green finance through four key initiatives, one of which is to develop a taxonomy. More information on the first consultation in January 2021 can be found in our article titled “Green Finance Industry Taskforce consults on taxonomy and launches environmental risk management handbook to support green finance”.

Reference materials

The following materials are available on the websites of MAS www.mas.gov.sg and the Association of Banks in Singapore http://www.abs.org.sg/: