Asia-Pacific

MAS’ Gprnt May Offer ESG Data Blueprint

Industry experts anticipate MAS-led digital ESG platform will improve sustainability reporting across the real economy and financial sector.

A platform due to go live this quarter in Singapore could provide a new model for sharing decision-useful, standardised and compliant ESG data with investors and other stakeholders, according to participants.

Led by the Monetary Authority of Singapore (MAS), the country’s central bank and financial regulator, the initiative aims to improve the availability of the climate-related disclosures and ESG data required by financial institutions amid the rising trend of sustainability reporting.

Only 57% of large Asia-Pacific companies disclosed their climate-related targets, based on the latest Task Force on Climate-related Financial Disclosures (TCFD) data. This figure compares with 92% of European peers.

Factors contributing to this disparity include the diverse regulatory environments across APAC countries, which exhibit varying sustainability reporting requirements. In the region, Australia is moving closer to a mandatory climate-related financial disclosure regime while Singapore has proposed mandatory climate reporting for non-listed companies.

Yet, only 43% of listed companies in Singapore made climate disclosures in line with at least five of the recommendations of the TCFD in their 2022 fiscal year sustainability reports, according to a biennial study by Singapore Exchange (SGX) and the Centre for Governance and Sustainability at the NUS Business School.

In response to these challenges, MAS unveiled integrated digital platform Gprnt (pronounced Greenprint) during the Singapore FinTech Festival last November as part of MAS’ Project Greenprint. This platform, conceived a public-private partnership, intends to simplify how the financial sector collects, accesses, and acts upon ESG data.

Having undergone three years of development, Gprnt will be led by a newly established entity, Greenprint Technologies, and operate as a separate platform independent of MAS with equity shareholders.

Gprnt will receive collaborative support from strategic partners, including KPMG, MUFG, HSBC, and Microsoft, in addition to the MAS. Its official launch is anticipated in the first quarter of this year, with a phased rollout of its features scheduled throughout the year.

Bridging real economy and financial services

Gprnt aims to offer data that is valuable for both the real economy and financial institutions such as banks, insurers and asset managers, highlighted Anton Ruddenklau, Partner and Head of Financial Services at KPMG in Singapore in an interview with Regulation Asia.

This data is intended to inform decision-making processes related to resource allocation, with a particular focus on directing capital, liquidity, and risk solutions from the financial services sector back into the real economy.

Apart from collaborating with MAS on Gprnt, KPMG is contributing to shaping the platform’s business model, as well as engaging in efforts to attract investors and users. It is directly engaged in constructing the technology for the platform through its Digital Village team as well.

Japanese bank MUFG, also a founding member of Gprnt, believes that a holistic disclosure platform encompassing policy making, intelligent technology and trusted ESG data would be superior to others, according to Yip Shue Heng, Head of Asia Digital Strategy.

Its “public-private partnership, anchored on institutional diversity, uniquely meets this requirement,” he said.

Ruddenklau, who also serves as the Global Head of Fintech and Innovation, Financial Services at KPMG International, said Gprnt is currently in the beta testing phase, which aims to guarantee the functionality of the platform as well as securing recognition and buy-ins from banks.

It also helps to ensure that necessary controls are implemented to meet financial services requirements. Currently, there is a significant amount of work being undertaken in these areas, he said.

“The platform has received positive feedback from banks and central bank regulators globally, with a unique value proposition in offering a central bank-regulated platform for sustainability reporting and ESG practices. To my knowledge, no one else is doing this right now,” said Ruddenklau.

Gprnt expands upon pilot initiatives such as ESGenome, a digital disclosure portal developed by SGX and MAS to assist listed companies in producing sustainability reports.

The new platform “extends the data collection” of sustainability reports, said Michael Tang, Head of Listing Policy and Product Admission at SGX Regulation (RegCo) during a panel discussion at last year’s SGX Sustainability Reporting Review event. He also shared that SGX RegCo is investigating the potential interoperability between ESGenome and Gprnt.

Also speaking at the event, Kee Rui Xiong, Executive Director at MAS, noted that this broader initiative underscores a commitment to sustainability within regulator. This alignment responds to the formidable global and national challenges posed by climate change, where the financial sector and participants in the real economy play a pivotal role in addressing these challenges.

ESG gaps for SMEs

Technology-enabled ESG solutions are among the most effective ways to address pressing global concerns over climate change, said Yip. But he admitted diverse disclosure standards present hurdles.

“Most digital ESG platforms to date will struggle to achieve meaningful adoption because a myriad of different disclosure standards limits their growth across various jurisdictions and sectors. While the International Sustainability Standards Board (ISSB) may eventually set a comparable base for disclosures, this situation will persist for some time,” he added.

Furthermore, SMEs predominantly face a notable gap for ESG data while data for privately held businesses is accessible on a global scale according to an initial market assessment conducted by KPMG.

Ruddenklau pointed out that major data providers for ESG factors, primarily focus on reporting for listed organisations and not for those that are unlisted. However, the majority of global employment, economic activity and community structures are rooted in SMEs.

“Most of the economy is missing at the moment for ESG and climate data. Gprnt was born to connect the two halves together for better decision-making and to focus on addressing the black spot around the availability and use of this data to make decisions,” he added.

Around 70 million small and medium enterprises (SMEs) in Asia need help with sustainability reporting, highlighted Global Reporting Initiative (GRI) CEO Eelco van der Enden in an interview with Regulation Asia.

He explained that SMEs engage with large manufacturers serving clients worldwide and will need support in complying with the new ISSB standards, European standards, as well as emerging requirements from the US.

Notably, KPMG’s industry consultations revealed widespread interest in a disclosure capability for SMEs, enabling them to make verified disclosures for financing, investments, certifications, and informed business transitions.

The initial consultation was conducted within Singapore involving SMEs, banks, and multinational corporates, while the other global consultation aimed to understand the perspectives of potential customers.

At the bank and multinational level, participants listed the need for robust reporting for scope three emissions, a regulatory requirement. The Gprnt platform addresses this necessity, noted Ruddenklau.

“We found a real need to support financing and investing decisions within financial institutions,” he added.

The emergence of climate change and ESG exposed gaps in credit models, Ruddenklau noted, emphasising the need for information on credit risk assessments in both environmentally friendly and transitional industries.

Data access

By addressing the lack of agreement and availability of ESG data, Gprnt could significantly impact the industry according to Rati Bhattacharya, Partner & Regional Service Leader, Sustainable Operations, Asia at sustainability consultancy ERM (Environmental Resources Management).

“We foresee Gprnt aiding companies significantly in automating their ESG reporting processes. The expected benefits include unifying the reporting landscape, which is crucial given the diverse and evolving nature of ESG frameworks,” she told Regulation Asia.

Another potential benefit is the access to a broad database, which is vital for informed decision-making in sustainable finance and SME operations.

Ruddenklau also highlighted that Gprnt enhances SME transparency and attracts interest from organisations looking to consider SMEs as an asset class, such as pension funds or asset managers by providing previously unavailable information. This is crucial for addressing climate change and securing the necessary funding.

Bhattacharya also observed that a crucial aspect of Gprnt is the development of an ESG data marketplace and the cultivation of strong ecosystem partnerships.

Drawing a comparison to the ability of app stores to distribute apps across various markets, Yip said Gprnt marketplace had the potential to similarly expand the reach of transition finance products and solutions. He also underscored the importance of financing for transition activities, with MUFG favouring an open innovation approach.

Ruddenklau said the platform’s success would depend on attracting investors and significant users such as major banks and corporates, while Bhattacharya believes technological capabilities and engagement with ecosystem partners are crucial factors.

“MAS’s role in leading the development of monitoring, reporting, and verification frameworks, as well as ensuring robust data accountability, becomes increasingly important for the success of Gprnt in a multinational context,” she added.

Gprnt’s reach is expanding, particularly those with substantial SME customer bases like banks and supply chain owners, according to Ruddenklau. Discussions on licensing the platform and technology, utilising APIs, have taken place in Singapore, Southeast Asia, Hong Kong, the Middle East and North America.

“We want to support SMEs around transitioning and climate change. It is not just corporate social responsibility; it’s the fact that this part of the customer base needs help, and they don’t have the facilities to do that. It is important to have platforms like Gprnt to make it accessible, allow transparent participation, and be a fair platform for all,” he said.

 

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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