Investing in Climate: A Role for ‘Sovereign Climate Funds’
Marianna Kozintseva (Turning Point Macro, SKBI), Thierry Wizman (Macquarie Group)| Mar 2024 |
Efforts to address climate change have generally been focused on deploying mitigation technologies. However, it is adaptation technologies (and climate risk transfer) that will have to gain an increasing share of an investment pool dedicated to climate if human systems are to stay resilient to climate forces. Just like mitigation projects, adaptation projects have a strong public goods aspect, wherein public returns exceed private returns, and thus call for the state’s involvement. We argue that sovereign climate funds (SCFs) - new types of sovereign wealth funds with a climate investment mandate - can be critical purpose-built conduits especially for undertaking the needed decades-long programs of allocating resources to adaptation projects, without hindrance from political biases or “short-termism”. They can also function as “cushions” against potential future climate funding shortfalls and dispense payouts when climate disasters strike. We discuss the various climate-related adaptation investments that SCFs would be particularly well-suited to undertake.
Interim Report: Green FinTech and Data Centres in Singapore
Winston Chow (SMU), Karen P.Y. Lai (Durham University), Felicia Liu (University of York)| Aug 2023 |
This report presents interim findings from a research study on the future of green fintech and data centres in Singapore. Taking an interdisciplinary approach, we examine the economic, environmental, and regulatory dimensions of sustainable DC futures in Singapore, with the view of identifying transferable lessons to the rest of Southeast Asia and other tropical geographies.
Nature Investment as a Response to the Climate Crisis: Opportunities in Southeast Asia
Pernille Holtedahl (Imperial College)| Jun 2023 |
The objective of this SGFC report is to offer investors a menu of investment options. A range of these exist; from ‘armchair investing’ in fixed income markets with little need for detailed understanding, to money directed at real assets where investors are tied in over time. We offer two case studies: one outlining different investment vehicles for mangrove investing and another proposing a biodiversity linked sustainability-linked bond (SLB) for a sovereign issuer. While these are very different in terms of their investment profile and impact on creating additional financial flows, they are all part of mainstreaming nature into the investment agenda.
One fortnight has taken a lot out of global monetary policy stances
Leo Krippner (SKBI)| 28 Mar 2023 |
This report depicts the yield curve decompositions for the G4 economies and dollar-bloc economies in light of the recent decline in bond yields on banking sector worries. It shows that the expected stance of monetary policy has reversed substantially in these economies, and is now much closer to neutral. While banking sector worries may contribute to some tightening of financial conditions, the net overall easing seems premature while central banks are still seeking to cool their economies and bring inflation down.
ASEAN Renewables: Opportunities & Challenges
Mili Fomicov (Imperial College), Michael Waldron (Imperial College), Matt Jenkins (Imperial College), Tanguy de Bienassis (International Energy Agency)| Mar 2023 |
This SGFC report aims to improve financial transparency and provide more data pertaining to clean energy investments in Association of Southeast Asian (ASEAN) Member States. Our research has conceptualized renewable energy risk and return qualitatively and quantitatively. The report further clarifies the opportunities and barriers for private sector investors, as well as priorities and potential solutions for scaling up renewables investment. Individual ASEAN countries have been analysed separately, and as constituent parts of the regional dynamic.
Are Markets Interested in Adapting to Climate? Insights From Singapore
Tran Bao Phuong Nguyen (SKBI), Stella Whittaker (Imperial College) | Feb 2023 |
This SGFC paper collated the views of leading practitioners in Singapore on the pressing issues of market interest in adapting to climate change and offers several policy recommendations. The scale of the impacts and the economic losses the city could face without adequate adaptation was a motivation for the study. Due to its size, geographic location and economy, Singapore is particularly vulnerable when it comes to climate change concerns.
Impact Measurements and Standards: Academic and Practical Perspectives
Dave Fernandez (SKBI) and Wanyi Yang (SKBI) | Spring 2022 |
While trillions of dollars are invested in sustainability, little is known about whether these investments result in a positive impact. This article draws on work conducted at Singapore Management University and presents the difference between impact measurement and ESG ratings. It also discusses the recent initiatives from academics and practitioners and the challenges faced by impact measurement.
Harnessing Digitalization for Sustainable Economic Development: Insights for Asia
Edited by John Bernie (ADBI) and Dave Fernandez (SKBI) | Dec 2021 |
Digitalization has helped to transform economies by enhancing competitiveness and productivity across a wide range of sectors. The use of big data and the rise of online platforms have accelerated this process over the past decade. In addition, the adoption of digital solutions in the face of social distancing and lockdown measures introduced due to the coronavirus disease 2019 (COVID-19) pandemic has been integral to the economic recovery process. The shift to a digitalized economy has also reduced barriers to market entry for firms, lowered inequality, and led to a promotion of social and economic inclusion. Advances in digital technology have also had substantial positive impacts on the productive capacities of economies, helping to improve economic efficiency and long-run output growth potential.
Impact Measurement & Standards (White Paper)
Angeline Chua (SKBI), Hao Liang (SMU LKCSB) and Wanyi Yang (SKBI) | Dec 2021 |
A standardised impact measurement framework helps organisations accurately assess both positive and negative environmental, social, and governance (ESG) impacts of their business activities and investment. Singapore Green Finance Centre (SGFC) proudly presents its first whitepaper on ESG measurement and standardisation, building on its efforts co-developing an Impact-Weighted Account Framework (IWAF). It describes the stages involved in compiling impact-weighted accounts and uses examples to illustrate how organisations can apply the IWAF to their ESG impact measurement. This report also highlights the need to develop an Asia-focused IWAF due to the unique landscape of Asian economies.
ASEAN Development Outlook
ASEAN Secretariat (with contributions from SKBI research fellow, Marc Rakotomalala and SKBI Director, Dave Fernandez) | Jul 2021 |
The ASEAN Development Outlook (ADO) is the first report of its kind. In the inaugural report, an effort is made to chart progress towards inclusive and sustainable development in the ASEAN region, and to identify key challenges together with examples of best practices and candid analysis on lessons learned for future policy planning and programming. The SKBI working paper “Financial Technology and Inclusion in ASEAN” is referenced in this report, with contributions from SKBI research fellow, Marc Rakotomalala & SKBI Director, Dave Fernandez.
Sustainable Behaviour: How Individuals Practice Sustainability in their Everyday Lives
Marianna Kozintseva (Turning Point Macro; SKBI) and Alexey Gerasimovich (Knari Consulting) | Jul 2021 |
This paper summarizes the results of a field experiment carried out by Turning Point Macro and Knari Consulting In March 2021, whose goal is to understand how much attention individuals pay to climate change and to environmental and social responsibility - the considerations, which are swiftly becoming pivotal for corporate conduct. During the experiment, we have shared 82 short, sustainability-themed videos with 31 volunteers around the globe, asking them to watch the videos that caught their attention and to report their reactions. We have also conducted two user surveys - one in the middle, and one at the end of the experiment, asking the users about their daily sustainability routines and sustainability themes they identify the most with. We have found that sustainability is gaining traction worldwide: 90.3% of the users surveyed are now incorporating at least one sustainable practice into their daily routine. Not all sustainability aspects receive the same attention, however. While 68% of the users practice recycling and 52% work on improving the energy efficiency of their homes, only 13% check an ESG or governance rating when investing in a financial product. Among age groups, millennials show greater commitment to sustainability than the general population in 3 out of 5 sustainable behaviour categories.
Impact Assessment and Measurement with Sustainable Development Goals
Dave Fernandez (SKBI), Hao Liang (SMU LKCSB) and Mikkel Larsen (DBS) | Apr 2021 |
With the rapid growth of sustainable and responsible investment and widespread adoption of the environmental, social, and governance (ESG) reporting and integration by organizations, how to assess and measure ESG impact has become a critical issue. Although the UN’s Sustainable Development Goals (SDGs) provide a useful framework for investors and organizations globally to align their standards, the SDGs are vague on how to implement them at an organizational or activity level. Current practice relies heavily on third-party ESG rating providers, whose scores mostly apply to public equities only. They also suffer from biases, inconsistencies, and a lack of sufficient disclosure. Impact measurement is an alternative that grew out of impact investing that extends beyond public equities and circumvents many of the drawbacks of ESG ratings. However, despite its increasing popularity, impact measurement is still in its infancy and lacks standards that can be generalized across various business activities. In this chapter, we propose a new framework for impact assessment and measurement, leveraging our practical experience working with industry leaders from Singapore (DBS Bank) and the Netherlands (Impact Institute). Our framework focuses on quantifying, valuing, and aggregating the different kinds of impact - direct vs. indirect, absolute vs. marginal - for different stakeholders, and is highly implementable. It also helps organizations map the impact from their activities on various stakeholders to different SDGs, thereby providing a generalizable approach for organizations across sectors and countries. We define our conceptual framework and illustrate how it may be applied with a case study on measuring the impact of bank loans on the palm-oil and automotive sectors.
Macroeconomic Stabilization in the Digital Age
Edited by John Bernie (ADBI) and Dave Fernandez (SKBI) | Nov 2020 |
Macroeconomic Stabilization in the Digital Age provides insights into factors affecting the macroeconomic management of the economy in the digital age. Policymakers need to be aware of the increasing prominence of the digital economy and digital finance and seek to better understand how continued digitalization will affect policies aimed at managing the economy. For emerging market economies (EMEs), macroeconomic policy challenges have been exacerbated by the digital finance revolution in the aftermath of the global financial crisis and the coronavirus disease (COVID-19) pandemic, when many EMEs experienced large and volatile capital flows. Policymakers must also navigate through fluctuating trends in productivity and difficulties in estimating potential output in the era of digitalization. The book is organized into three main parts: (1) digital finance and the macroeconomy, (2) capital flows and systemic risk in the digital age, and (3) macroeconomic uncertainty and new challenges for central banks. Part I is set against the context of the shift in financial intermediation away from traditional banks as large technology firms have increasingly provided financial services over the past decade. This part of the book focuses on the macroeconomic effects of digital finance and financial technology. Part II examines capital flow-related developments in the digital age, where the expansion in cross-border capital flow channels can create additional hurdles for EME authorities in managing capital flows. Finally, Part III relates the digital age to challenges faced by central banks and the implications of digitalization for the monetary policy transmission mechanism.
Financial Technology and Inclusion in ASEAN
Dave Fernandez and Marc Rakotomalala (SKBI) | Aug 2020 |
Financial technology (FinTech) has the potential to be a positive, game-changing force for boosting financial inclusion in ASEAN, as mobile money and greater access to basic financial services have the capacity to improve the economic well-being of households. Indeed, technology has been shown to drive broader increases in economic growth, which itself interacts positively with financial inclusion. In a more direct way, new, specific fintech developments globally and in ASEAN itself can be beneficial for financial inclusion. In this paper, we look at financial inclusion and technology, and how cooperative efforts between ASEAN policymakers, the private sector, and their broader communities can promote financial stability and inclusive growth through the deployment of fintech applications supported by cloud computing, big data analytics, the Internet-of-Things (IoT), Artificial Intelligence (AI), blockchain technologies and cryptocurrencies.
Technical Review: Impact Measurement Project
Hao Liang and Phuong T.B. Nguyen (Singapore Management University) | Mar 2020 |
This report work was commissioned by DBS and SMU’s Sim Kee Boon Institute and serves as an evaluation of the Pilot Study on DBS Impact Measurement conducted by Impact Institute. This report was written by Professor Hao LIANG and Dr Phuong T.B. NGUYEN of Singapore Management University (SMU). Professor Dave Fernandez and Dr Junho PARK from SMU also made significant inputs into the report.
Sustainable Digital Finance in Asia: Creating Environmental Impact through Bank Transformation
Ryan K. Merrill (SMU), Simon JD Schillebeeckx (SMU LKCSB) and the Global Mangrove Trust with Sofie Blakstad (founder of hiveonline) | Jan 2019 |
This report work was commissioned by DBS, the Sustainable Digital Finance Alliance, and UN Environment. This report was written by Ryan K. Merrill and Simon JD Schillebeeckx of Singapore Management University and the Global Mangrove Trust with Sofie Blakstad, founder of hiveonline.
Data is arguably the most valuable resource in the digital economy. Used effectively and responsibly it has the potential to serve as a driving force in creating a more sustainable world. The potential is especially potent in the financial sector given its central place in the financial system, and its access to and use of data.
The SKBI Big5 Survey
Sim Kee Boon Institute |
The Sim Kee Boon Institute (SKBI) Big5 survey focuses on the multiyear outlook and assessment of the biggest five economies in the world, namely China, Euro Area, India, Japan and the United States. The Institute, via the Big5 survey and Post-Survey event, seeks to establish a recurrent platform for a diverse group of participants in Singapore to explore the relevant risks and opportunities surrounding the global economic landscape. For enquiries regarding the survey, please contact SKBI principal researcher, Thomas Lam (thomaslam [at] smu.edu.sg).
Read the reports: 2023 February, 2022 August, 2022 February, 2021 August, 2021 February, 2020 August, 2020 February, 2019 August
Survey of Professional Forecasters
Federal Reserve Bank of Philadelphia (with contributions from SKBI principal researcher, Thomas Lam) |
The Survey of Professional Forecasters is the oldest quarterly survey of macroeconomic forecasts in the United States. The survey began in 1968 and was conducted by the American Statistical Association and the National Bureau of Economic Research. The Federal Reserve Bank of Philadelphia took over the survey in 1990. SKBI Principal Researcher, Thomas Lam, has been participating in the Survey of Professional Forecasters over the years.
Read the forecasts: 2023 Q3, 2023 Q2, 2023 Q1, 2022 Q4, 2022 Q3, 2022 Q2, 2022 Q1, 2021 Q4, 2021 Q3, 2021 Q2, 2021 Q1, 2020 Q4
The Livingston Survey
Federal Reserve Bank of Philadelphia (with contributions from SKBI principal researcher, Thomas Lam) |
The Livingston Survey was started in 1946 by the late columnist Joseph Livingston. It is the oldest continuous survey of economists' expectations. It summarizes the forecasts of economists from industry, government, banking and academia. The Federal Reserve Bank of Philadelphia took responsibility for the survey in 1990. SKBI's Principal Researcher, Thomas Lam, has been participating in The Livingston Survey as the only Asian voice.
Read the forecasts: June 2023, December 2022, June 2022, December 2021, June 2021, December 2020
Inflation Expectations in Perspective
Research Notes | Apr 2019 |
Globally, central banks track different measures of inflation expectations to better understand the behaviour of current and future inflation. Although inflation expectations are hard to derive and measure, economists usually attempt to tease out the relevant information from surveys, models or market-based indicators.
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