SGX Group’s Herry Cho discusses the role SGX plays in mobilizing capital for climate transition, the instruments available, and the focus of COP28

Sally Duros

Sally Duros

Freelance Editor

COP28 is in full swing in Dubai now and to preview the financial discussions that are occurring publicly and behind closed doors, we talked in early November with Herry Cho, Managing Director, Head of Sustainability and Sustainable Finance, for Singapore Exchange (SGX Group.) Cho highlighted the role of financial infrastructure platforms such as SGX, in financing the transitions to come in sustainability, social change, and climate change.

Cho emphasized the importance of financing transitions through various instruments, notably green, social, and sustainable bonds (GSS bonds), and the evolving landscape of sustainability-linked bonds (SLBs). GSS bonds, established for years, have a proven track record in using proceeds for sustainable purposes, whereas SLBs are forward-looking with sustainability targets incorporated into their structure.

In our discussion Cho highlighted the significance of Sustainability Performance Targets (SPTs) within SLBs, emphasizing the forward-looking nature of the instruments and their measurement against material, science-based benchmarks, aiming for genuine impact on emissions reduction. Cho stressed the need for credible SPTs and transparent disclosures in these instruments, considering the challenges faced in measuring their impact and ensuring meaningful incentives or penalties for performance.

Cho discussed SGX’s collaboration with BlackRock, through the listing of iShares MSCI Asia ex-Japan Climate Action ETF. She also talked about SGX’s commitment to enhancing sustainability reporting by adopting the ISSB (International Sustainability Standards Board) framework, aiming to ensure global standardization and comparability in disclosures. She touched on the memorandum of understanding between SGX, the Monetary Authority of Singapore, and the United Nations Commission on Sustainable Development (UN CDSC) that will enhance their collaboration and strengthen free access by stakeholders to key climate transition-related data.

Looking ahead to COP28, Cho said the financial sector expects discussions on transition financing, adaptation measures, and nature-related solutions, acknowledging the need for a balanced approach considering socio-economic factors and global geopolitical events.

Cho emphasized SGX’s commitment to supporting a collaborative ecosystem focused on sustainable finance, acknowledging that their efforts are part of a broader collective push towards a more sustainable future.

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