As governments gear up to reduce emissions following COP26, close cooperation between institutions will help steer Asia’s climate transition, says Singapore Exchange (SGX) CEO Loh Boon Chye.
“We have been working to provide leadership for financing Asia’s climate transition and strengthen capacity-building for the broader financial ecosystem. The clock is ticking and the transition will require consensus, collaboration and cooperation from all of us. We believe exchanges can help steer the pathway to net zero,” says Loh.
Speaking at the Futures Industry Association Asia Conference on Dec 7, Loh highlights that SGX is one of the founding members of the Net Zero Financial Service Providers Alliance and Glasgow Financial Alliance for Net Zero (GFANZ). Launched in April, 450 institutions have since signed up to GFANZ, committing some US$130 trillion.
“These large flows of capital will be a force in financial markets for years to come,” Loh adds.
Loh believes dealing with climate change will require the same key principles that form the “bedrock” of marketplaces. “Climate transition should be fair, taking into consideration the varying social, economic needs of developing countries.”
“It should be orderly, accounting for the complexities of transition and adaptation; and it should also be transparent, with data and disclosures being available for informed decision-making,” he adds.
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Working together will help countries and institutions tackle other problems besides climate change. “Global supply chains are still facing immense challenges from changes in consumption patterns brought about by the pandemic. Given the sheer scale of disruption, cost pressures are likely to persist for some time to come,” says Loh.
“On our platforms, we continue to witness strong risk-management activity in bulk commodities such as iron ore and freight derivatives — the backbone of global trade,” he adds.
For almost two years now, the world economy has endured an unprecedented journey, says Loh. “We are not through yet; the road to repair and recovery will be long, and markets are already being transformed in fundamental ways.”
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“I urge all of us in the global cleared derivatives space — whether you are an investor or market participant, an exchange or clearing house, or regulator — to be willing to come together and collaborate.”
Photo: Bloomberg
