Keynote Address By Loh Boon Chye, CEO, SGX Group, At 9th Annual Conference Of The Principles 2023

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1. Ms Indranee Rajah, Minister in the Prime Minister’s Office, Second Minister for Finance and Second Minister for National Development, ladies and gentlemen, good morning. Thank you to ICMA for organising this event in Singapore.

Asia is an important part of the transition equation

2. For such a flagship global event to be held in Asia speaks volumes on the importance of this region in net zero transition. Globally, close to 150 countries have a net zero target, working out to about 92% of global GDP committed to net zero.

3. As a region, Asia is growing faster than the rest of the world. The weight of Asia in global GDP continues to rise and is expected to reach about 40% by 2040. At the same time, half of global emissions come from Asia.

4. One of the key challenges in Asia is balancing growth and prosperity for people, and emissions-reduction, which are sometimes at odds with each other. What is also clear is that more funding is needed in this part of the world. By 2030, US$16 trillion needs to be mobilised in Asia Pacific.

Role of Bond Markets in Decarbonisation and Net Transition

5. The bond market, one of the world’s largest capital markets, plays a crucial role in mobilising capital towards decarbonisation and net transition. This is evident from the development of industry efforts, like the Principles, that have supported the accelerated growth of the green and sustainable bond markets.

6. SGX Group, as the leading listing venue for international G3 currency bonds in APAC, has been ramping up our sustainable fixed income initiatives, including actively engaging and educating the market on green and sustainable bonds. Today, more than half of APAC’s G3 currency green, social, sustainability, sustainability linked bonds, or for short, GSSS bonds, are listed on SGX.

7. In the past year, GSSS bonds have grown to almost 20% of all bond listings on SGX, majority of which adopts the Principles. Notwithstanding the lower global bond issuance volumes due to macro conditions, it is noteworthy that Asian GSSS bonds, as a proportion of total Asian bond issuances, continue to inch upwards.

8. The sustainable bond market, however, has to raise its growth trajectory and channel more funds to where it is urgently needed – that is, decarbonisation and transition efforts. Most of such funding today is channeled to projects that are already green or sustainable. This needs to change in th...

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