Singapore launches blockchain-based ESG registry
The Monetary Authority of Singapore (MAS) has on Wednesday (May 18) launched ESGpedia, a blockchain-based registry platform that provides environmental, social and governance (ESG) data of companies across various sectors in a single location.
The registry was developed by fintech company Hashstacs (Stacs) and will power Greenprint ESG Registry, one of the four digital utility platforms that MAS has announced under Project Greenprint.
“In time, data housed in the Greenprint ESG Registry will form a central pillar that underpins the financial sector’s effective mobilisation of capital towards sustainable projects, as well as the accurate tracking and quantification of emission reductions, abatement levels, and other sustainability KPIs linked with these projects,” Darian McBain, chief sustainability officer at MAS said.
The remaining three digital utility platforms are a common disclosure portal for financial institutions and companies, a data orchestrator that aggregates data from existing portals, and a marketplace that connects green tech providers to investors, financial institutions and companies.
FIXED DATA
ESGpedia will record and maintain details of ESG certifications and data verified by certification bodies in different sectors. Being built on the blockchain, the registry will be unalterable, which would give financial institutions, corporate and regulator confidence that the data can be trusted, according to Stacs managing director Benjamin Soh.
“The very nature of the blockchain as a permanent, indelible, and unalterable ledger of transactions, that allows ease of access by different users is precisely what is needed from a public ESG registry,” Soh told AsianInvestor.
The registry is the first of its kind, he added. While various organisations including the World Bank, have highlighted the value of a common registry, ESGpedia aims to track data across industries on a wider scale.
The registry counts financial institutions such as CSOP Asset Management, Fidelity International and Singlife with Aviva as partners that currently use the registry platform.
“We see great potential in the sphere of green finance. Through our partnership with Stacs, we hope to create a positive impact and provide customised and potentially cost-saving solutions for customers who successfully reduce their carbon footprint,” said Pearlyn Phau, Group CEO at Singlife with Aviva.
CENTRALISED SOURCE
The ESG registry is an answer to calls from financial institutions for centralised ESG data, particularly from asset managers and owners seeking to meet their ESG targets.
“Asset managers are getting savvy to the need for better screening and scoring of everything in the ESG universe, as well as understanding the data they are receiving from ESG data providers while using more of their own analytics capabilities to project out into the future,” Soh pointed out.
Institutional investors including family offices have resorted to developing their own in-house capabilities or third parties for what they hope will be reliable ESG data, and have consistently called for regulators to develop a central database.
But even with the launch of this registry, challenges remain, such as an over-reliance on publicly available non-financial ESG data, Soh said.
“What’s available in the private sector is typically far more fragmented and non-transparent, making it hard for institutions and asset managers operating in private markets when it comes to ESG screening,” he said.
Additionally, MAS has not yet made it mandatory for Singapore-based companies to provide data to the registry. But Soh said that companies should be motivated “in order to win deals in a world where buyers and customers are increasingly focused on sustainable choices”.
The registry has also been designed to make it easier for companies to input their data through integrations with various data platforms.