CSF hosted Dr Hao Liang of the Singapore Green Finance Centre, for a roundtable meeting with senior representatives from our partner organisations.
The discussion covered the findings of Dr Liang’s report The Effects of Financing Green and Brown Sectors: What Do Theories and Evidence Say?
The report finds that conventional green finance—directing capital only to low-carbon sectors—delivers only modest emission reductions and can unintentionally raise emissions from carbon-intensive industries by restricting access to transition funding. Using modeling and literature evidence, the authors show that penalising “brown” sectors can backfire, while supporting their gradual decarbonisation through transition finance is more effective and less economically disruptive. They recommend policies that expand transition finance markets, alongside green finance to achieve orderly and inclusive progress toward net-zero.
Dr Hao Liang discussed how the report’s findings have been welcomed by regulators in Singapore as evidence to inform policy.
Dr Liang shared that when financing transition activities for ‘brown’ firms, we see a reduction in emissions at the economy level – even without labelling the funding as ‘transition’. He anticipated that with wider adoption of taxonomies that include transition activities, this effect will be amplified.
We discussed the neologism ‘taxomania’, used to describe the enthusiasm with which countries are embracing taxonomies.
The Singapore taxonomy includes a transition category, as do the Australian and New Zealand taxonomies. It is anticipated that common ground will increasingly be found and that the various taxonomies will converge, in time.
Left to right: Alex Wang (Senior Manager, Sustainable Finance, Bank of New Zealand) James Paterson (Head of Sustainable Finance, Corporate Banking, ASB) Adam Coxhead (Head of Sustainable Finance, BNZ) Dr. Hao Liang (Associate Professor of Finance, Academic Director of the Singapore Green Finance Centre, and Co-Lead of the Sustainable Business Research Peak at Singapore Management University) Jo Kelly (CEO of the Centre for Sustainable Finance (CSF)), Lucas Kengmana (Senior Investment Strategist, NZ Super Fund), Jackson Rowland (Director, Aotearoa New Zealand Stewardship Code), Anne-Maree O’Connor (Head of Sustainable Investment, NZ Super Fund), Fran Burley (Head Loans & Markets Execution, ANZ), Andy O’Hare (Senior Advisor, Energy, CSF) Nicholas Swallow (Partner, KPMG)
