SINGAPORE - A digital platform backed by the Monetary Authority of Singapore (MAS) aims to bring transparency to efforts by companies to cut greenhouse gas emissions and improve their social as well as environmental behaviour.
This in turn will help investors determine which firms are taking genuine steps to fight climate change, reduce damage to the environment and end bad social practices such as forced labour.
The platform, called the Greenprint ESG Registry, is being developed by Singapore financial technology firm Stacs in partnership with MAS. It is one of four pilot digital platforms announced last November by the MAS that aim to improve data on sustainability to support green finance in Singapore.
"In the future, to be profitable, you have to be sustainable," said Mr Benjamin Soh, co-founder and managing director of Stacs, during a media briefing on Thursday (Jan 20).
Companies are the top sources of greenhouse gas emissions and major drivers of environmental damage, from mining to agriculture to industrial pollution. Globally, there is a push for the corporate world to become greener and more in tune with the global aim to cut carbon footprints and to be more nature-friendly too.
A major way is for companies to improve their practices and to be formally certified for doing so.
But, sometimes, genuine action is overshadowed by greenwashing, in which companies make false promises.
The registry aims to tackle this by recording and maintaining the provenance of environmental, social and governance (ESG) certifications accorded by official bodies in different sectors, as well as data and metrics that are verified by qualified third party auditors.
This will help banks and other investors track and analyse companies listed in the registry, which uses blockchain technology to ensure security and ease of access by different users.
Central banks and exchanges are increasingly requiring firms to adopt strict ESG and climate risk reporting standards, and banks and other financial institutions, such as pension funds, are also much more careful about whom they will lend to or invest in. This is to meet tougher standards to limit financing to firms that fail to rein in greenhouse gas pollution or those that damage the environment.
But a major problem is the lack of a centralised and standardised system that can store trusted ESG data on companies.
Greenprint ESG Registry, which will become public, is the first of its type in Singapore, said Mr Soh.
Registry clients include banks, asset managers and exchanges. The registry is still in its pilot phase but the aim is for financial institutions to pay a subscription to access ESG certification and other data, he said.
At present, the registry focuses on five sectors: transport, building and construction, manufacturing, food and agriculture, and renewable energy. But it aims to scale this up as the site develops further.
Mr Soh said the level of detail the registry holds for each firm depends on the sector and activities of the company. But it can be quite detailed, for example, tracking a firm's progress in cutting emissions for vehicle fleets or reducing building emissions, or certification for individual oil palm or coffee plantations to ensure no deforestation or slavery.
The aim is to encourage a growing number of firms to add their ESG data to the registry with the hope this will broaden corporate sustainability actions in Singapore and the region, which in turn will influence consumer actions and choices, too.