During the Singapore Fintech Festival last month, the Singapore Monetary Authority (MAS) announced that it will partner with the industry to pilot four digital platforms under Greenprint project to meet the needs of the financial sector of good data on sustainability.
The Greenprint project was launched in December 2020 to leverage innovation and technology to promote a green finance ecosystem by helping to mobilize capital, monitor sustainability commitments and measure impact.
According to MAS, one of the key challenges facing funding for sustainability is the difficulty of accessing high-quality, consistent and granular sustainability data.
Addressing these data gaps will allow financial institutions to direct capital toward sustainability projects in a more scalable way, effectively monitor their sustainability commitments, and quantify the real risks and impact of their portfolios.
“Technology is a key factor for the financial sector to meet the challenges of the green transition and achieve zero net emissions,” said Sopnendu Mohanty, MAS ’FinTech director.
“The Greenprint project provides a functional digital infrastructure that aggregates new and existing environmental, social and governance (ESG) data from the ground up across multiple industry platforms and solutions to facilitate trusted ESG data flows between the financial sector and the real economy, both in Singapore and globally. ”
Since the announcement of the Greenprint Project, MAS has been committed to the financial industry and other industry sectors to identify potential digital facilitators to address data challenges.
One of the four digital platforms it is currently piloting is the Greenprint ESG Data and Certification Registry. It is being developed in collaboration with local fintech technology company Hashstacs Pte Ltd (STACS), and the pilot is expected to be completed in the second half of 2022.
What does the registration do?
Blockchain-based logging will record and maintain the provenance of ESG certifications granted by certification bodies in different industries, as well as data and metrics that are verified by qualified external auditors.
This basically provides financial institutions, companies and regulators with a single point of access to this certified data and facilitates the flow of trusted data.
“It’s a record that the financial sector needs a lot, because when it comes to sustainable finance, there is often a complete lack of information. That way, this ESG record will be able to provide data in one place, “said Benjamin Soh, CEO of STACS, during a virtual media roundtable on Tuesday (December 1st).
“It will be an industry-wide library that will store ESG data and certificates. The overall goal is to enable financial institutions and investors to continuously monitor their ESG commitments to mobilize investments more effectively.”
Benjamin noted that there is a problem with fragmented ESG data groups. Many different companies are on the path to sustainability, but they are all in very specific and fragmented industries.
Therefore, the way to achieve sustainability is very personalized. It is very difficult for a bank today to really understand its impact whenever it makes an investment or a loan. So what we intend to do here with the ESG Registry is that we have deployed a blockchain. [It will] serve as the sole source of truth, transversal to various sectors of the industry.
– Benjamin Soh, CEO of STACS
Through APIs, the ESG Registry can support a number of later integrations, such as supporting financial institutions in commercial financing and portfolio monitoring.
Financial institutions will benefit from easier access to an infallible set of digitally processed data on sustainability projects in different sectors of industry.
As part of the blockchain, STACS has also deployed some different modules that are already integrated into the different sectors. This will first of all help to receive and ingest ESG certificates from different sectors.
These certificates are the actual certificates issued by each sector. For example, there is the Green Mark for Building and Construction Authority (BCA) and Fair Trade for Agriculture. These are various certifications from different bodies that we want to be able to ingest and on the platform. In other words, we digitize them.
– Benjamin Soh, CEO of STACS
Second, many of these sectors have a variety of technologies. For example, they are using a variety of Internet of Technology (IoT) data analysis (satellites, drones, etc.) to capture certain ongoing data from different industries.
With this in mind, STACs also want to capture some of this ongoing data in an aggregate manner and store it in the log.
“They can validate our platform data to perform ESG scores or ESG ratings. They can also retrieve reports from our on-demand platform at any time to support better portfolio scenario analysis,” he said.
Finally, STACS wants to be able to introduce several industry-standard reporting protocols, such as terminology and taxonomies, so that users can improve financial sector ESG reporting.
The ESG Registry will essentially connect with various trusted certification bodies and industry platforms and aims to support end-to-end traceability and transparency of complete business value chains. More ESG data aggregations can be performed, creating the potential for continuous impact reporting and monitoring.
The aim is to significantly improve the quality of available ESG data, so that financial institutions can raise capital more confidently towards ESG projects, in the form of financing, investment or insurance linked to the sustainability and trade of carbon credits.
The ESG Registry platform aims to address two relevant issues in green finance: the lack of transparency and confidence in ESG certifications and the inefficiencies in accessing different standards and certification requirements in different industries nationwide, and even and all worldwide.
MAS is pleased to work with Hashstacs to bring together different actors from different industries and sectors to provide, verify, certify and share data in a secure and efficient way, in order to unlock green funding.
– Sopnendu Mohanty, Chief FinTech Officer of MAS
STACS sees an increase in collaboration interest
“STACS has been in business since 2019, providing digitization and automation through our award-winning blockchain-based technology to financial institutions. Over the past two years, we have managed to digitize many parts of the financial services process,” he said. Benjamin.
“Recently, we have begun to engage with financial institutions in the specific aspect of sustainable finance, and this excites us because we want to help advance the future of sustainable finance.”
He has extensive experience in providing DLT infrastructure for the digitization of the financial sector. Its clients and partners include banks, stock exchanges, asset managers and companies in different sectors. It has recognized the importance of sustainability, broadening its focus to technologically improve and enable sustainable practices.
STACS also won the MAS Global FinTech Innovation Challenge Awards 2020 under the theme Sustainability and Green Finance and was awarded the best FinTech ESG (Asset and Wealth Management) solution at the DigFin Innovation Awards 2021.
The ESG Registry is currently in its beta phase, with modules and APIs ready for integration, and will continue to improve based on the collective contributions of industry partners over the coming months.
According to STACS, it has received expressions of interest in exploring the collaboration with the ESG Registry of various financial institutions and organizations, such as Aviva Singlife, Citi, OCBC Bank, UOB, SGTraDex and Surbana Jurong.
“It is encouraging to see more commitment to green space and sustainability through the growing demand from financial institutions for better monitoring and measurement of green impacts,” Benjamin said.
“Collective efforts and synergies between DLT and other technologies / platforms will accelerate the achievement of a greener nation by serving many of the world’s leading financial institutions and empowering all institutions (financial and non-financial) to unlock impactful ESG strategies. for greater commercial value “.
Featured Image Credit: STACS / MAS