PwC Singapore at COP29
PwC Singapore will join the Singapore Pavilion at COP29 to catalyse the shift from visionary ideals to concrete actions, realising our shared climate vision together.
As with any industry where advancement and innovation are outpacing regulation, the complex landscape can be difficult for businesses to navigate their operations. From adapting to new realities in emerging industries such as Web3, evolving regulations, to compliance and commitment to environmental, social, and governance (ESG), it is of great importance for businesses to keep updated on key trends and developments in order to remain internationally competitive.
Here are several key highlights:
- ESG - The Monetary Authority of Singapore (MAS), central bank and financial regulator of Singapore, announced the launch of the Singapore-Asia Taxonomy for Sustainable Finance, while PwC Singapore joined the Singapore Pavilion at COP28 in Dubai, with the aim to accelerate collective climate action.
- Metaverse - In a quest to redefine reality, Sony partners Siemens to unveil a mixed-reality headset as an innovative solution for immersive design and collaborative product engineering.
- Digital assets - After a turbulent 2023 for the crypto industry, with the ongoing saga of FTX, Silicon Valley Bank collapse, massive fines and penalty of Binance, the crypto industry has finally seen a positive turnaround this year. The U.S. Securities and Exchange Commission has passed and approved 11 bitcoin exchange-traded fund applications after a decade.
- Emerging regulatory trends - The Monetary Authority of Singapore has raised the bar on risk management of outsourced services to further enhance the resiliency of Singapore's financial services sector, with the release of Notice 658, Notice 1121, and updated guidelines for outsourcing. The development is also in line with global trends on third party risk management.
Feel free to explore the topics below and we welcome any opportunity to discuss more with our respective PwC representatives.
Main drivers
Environmental, Social and Governance (ESG)
Singapore continues to see good progress and momentum with regards to ESG initiatives and developments. The MAS recently launched the Singapore-Asia Taxonomy, which is the first such taxonomy to introduce a "transition" category, as well as the Code of Conduct for ESG ratings and data providers to ensure transparency around the methodologies and data sources used. Additionally, PwC Singapore joined the Singapore Pavilion at COP28 in Dubai in identifying innovative decarbonisation solutions, transformation and action plans that can help the region and beyond adapt to the impact of climate change.
Regulations and standards
Singapore launches taxonomy to define green and transition activities across key sectors
The Monetary Authority of Singapore launched the Singapore-Asia Taxonomy for sustainable finance which details thresholds and criteria aimed at enabling users to distinguish between green, transition and ineligible economic activities.
MAS releases finalised Code of Conduct (CoC) for ESG ratings and data providers
Key principles for providers outlined in the CoC include the adoption of written policies and procedures to boost transparency, comparability and reliability of ESG ratings and data.
The Asian Development Bank, Global Energy Alliance for People and Planet and MAS to establish energy transition acceleration finance partnership in Asia
Through this collaboration, the partners will develop a pipeline of opportunities, and deploy innovative and scalable financing structures to drive decarbonisation in Asia.
The European Financial Reporting Advisory Group and Global Reporting Initiative (GRI) to collaborate on sustainability reporting standards development and training
The organisations, as part of the new collaboration agreement, have released a GRI-ESRS Interoperability Index, a new tool outlining how the disclosure requirements and data points in the European Sustainability Reporting Standards (ESRS) and the GRI standards relate to each other, preventing the need for double reporting for entities disclosing under both systems.
Industry update
Asset management
Macquarie acquires 50% stake in Enel’s Greek renewables business for €250 million
The acquisition to develop a pipeline of renewable energy projects in Greece marks the latest investment by Macquarie in the country's green energy market, following its 2022 acquisition of a 49% stake in Hellenic Electricity Distribution Network Operator.
Apax raises $900 million for Global Impact Fund
This funding aims to support companies delivering tangible social or environmental impact, utilising a proprietary impact measurement system to evaluate and monitor impact and identify and track outcomes across the portfolio. It targets key themes including health and wellness, environment and resources, social and economic mobility, and digital impact enablers.
BNP Paribas launches new climate impact infrastructure debt fund
The launch of BNP Paribas Climate Impact Infrastructure Debt is a new fund aimed at financing climate change mitigation, and supporting energy transition projects across Europe. The fund is classified as Article 9 under European Union’s Sustainable Finance Disclosures Regulation (SFDR) regulation, with an investment grade profile.
Banking and capital markets
ING to phase out financing for oil and gas exploration and production by 2040
The Amsterdam-based global bank will phase out financing of upstream oil and gas activities while setting a new target to triple financing for renewable power generation. The new commitments are aimed at building on the progress made at the UN COP 28 climate conference, which resulted in an international agreement to transition away from fossil fuels to reach net zero by 2050, and a call to triple renewable energy capacity globally by 2030.
World Bank to boost climate financing share to 45%, broaden climate debt clauses
The international financial institution will devote 45% of its annual financing to climate-related projects by 2025, up from a target of 35%, and extend debt repayment pauses following climate disasters. This was announced at the COP28 climate conference in Dubai as the next steps to better respond to climate change and other global crises.
Insurance
COP28: Key messages and implications for insurers
This article discuss four key takeaways from COP 28 recently held in Dubai, from 30 November to 13 December 2023, and their implications for the insurance and reinsurance companies.
Sustainable/ESG investing in insurance: Frequently asked questions
The insurance industry is known to be historically conservative and risk-averse, making it not immune to the paradigm shift of the sustainable investing. This article discusses a few frequently asked questions relating to ESG investing in insurance, ranging from why these insurers are implementing the sustainable investment strategies, to the challenges or barriers that insurers need to be aware of.
China’s first ESG disclosure guide for insurers
China’s insurance industry has a new ESG voluntary guide, setting standards for insurance companies to disclose ESG information. It aligns with international ESG disclosure standards such as those of the Global Reporting Initiative, Sustainability Accounting Standards Board, and the Stock Exchange of Hong Kong; and incorporates elements “unique” to China and the insurance industry, including rural revitalisation, insurance agent management, sustainable insurance products and green investment of insurance funds.
ESG platforms, solutions and tools
Dun and Bradstreet partners with Climate Engine to launch solution for businesses to assess and mitigate climate risks
The two companies has launched a new solution, D&B Climate Risk Insights, aimed at helping businesses to understand, prepare for and mitigate climate-related risks.This comes amid a growing challenge to businesses globally, arising from the frequency and severity of climate-related events affecting supply chains, the financial landscape and the insurance industry.
Terrascope launches solution to measure and manage forest, land and agriculture emissions
The new module aims at enabling the measurement and management of Forest, Land, and Agriculture (FLAG) emissions. It starts with FLAG screening, reviewing company operational and value chain models to determine FLAG exposure and the need for science-based FLAG targets. It also provides a measurement tool for companies in need of these targets, covering land use change estimation and land management emissions from activities such as fertilizer application, farm activities or livestock rearing.
Interesting reads
ESG Clarity: “Be clear about what you can achieve"
Claudia Wearmouth, Columbia Threadneedle global head of responsible investment, discusses managing expectations when it comes to engagement. She further explains that “you have to be really clear with engagement and not overstate your role. You’re one stakeholder, you’re one of often many other investment houses suggesting ideas or having that debate. As a house we are more cautious, which I would rather be than overstate and underdeliver."
Six predictions for ESG in 2024: The year ESG emerged from fad to essential business
This year, 2024, will be the one in which companies will begin to take ESG activities seriously, proving once and for all that ESG is here to stay. While it is true that this trend started as the result of the need to comply with regulations and risk management, by this year, companies will fundamentally overhaul their business structures.
Related PwC insights
Metaverse
Digital technology is transforming the banking industry, with the increasing adoption of key technologies such as Augmented Reality (AR), Virtual Reality (VR), Artificial Intelligence (AI), blockchain, mobile banking and cloud computing. This presents huge potential for financial services in the metaverse as investments and strategic alliances made in these technologies continue to develop the virtual environment.
Market developments
VR market keeps shrinking even as Meta pours billions of dollars a quarter into metaverse
Meta's ambitions in the VR market faces uncertainty as sales plummet. Despite challenges, there is potential for the VR market to expand in future with the upcoming addition of Meta's Quest and Apple's Vision Pro headsets.
Singapore updates AI strategy with aim to contribute globally valuable breakthroughs
With the objective of being a Smart Nation, Singapore aims to become a place where the world's top AI talents gather. The revised national AI strategy includes AI-specific trainings, dedicated physical space for AI, and the allocation of carbon budget for date centre, which will be rolled out over the course of the next three to five years.
Industry update
Financial services
ZA Bank Supports over 80 Web3 companies with commercial banking services
The Hong Kong digital-only bank leveraged technology and cost-effective measures to launch a fund subscription fee discount, resulting in user savings of 100 million yuan on investment fund subscriptions. In December 2023, the bank announced plans to introduce fiat currency-based virtual asset trading services for retail investors through its ZA bank application.
Banking On Cloud Enterprise Resource Planning (ERP) To Drive Resilience And Growth
Adoption of cloud ERP systems can improve efficiency for banks as it improves accounting processes and productivity. Generative technology, machine learning and predictive analytics help streamline operations, meeting customer expectations, driving operational effectiveness, and unlocking new avenues for growth.
How Web3 and AI will transform finance
Generative Artificial Intelligence presents huge growth opportunity in the finance industry as it can automate manual tasks such as the tailoring of market intelligence and customer journey at scale, driving cost and operational efficiencies. An organisation integrating and implementing AI solutions need to consider possible use cases, employee readiness and potential challenges that comes with using the technology.
Strategic alliances
Meta and IBM Launch AI Alliance
This collaboration brings together over 50 companies across a range of industries, aiming to foster knowledge sharing and innovation in Artificial Intelligence. Leveraging on shared resources, the AI alliance plans to develop benchmarks, standards and tools to evaluate the responsible use of AI in future.
Siemens and Sony launch platform for immersive engineering in the industrial metaverse
Sony is partnering Siemens to introduce a new solution for immersive design and collaborative product engineering. The platform will not only allow users to see real-scale 3D models in an Extended Reality environment, but also create and modify them in it. With this platform, Sony aims to empower designers and engineers to work in a more immersive creative experience.
Industry use cases
Singapore's Atomionics taps gravity, AI in hunt for critical minerals
Singapore-based start-up Atomionics develops a mining technology called 'Gravio' to virtually identify mineral ores efficiently, aiming to significantly reduce the costs and time related to mining critical metals and minerals.
Designing a coach training program for AI transition for human resource
The Wheel of Work for HR sets out a framework consisting of broad themes that companies can use in curating coach training programs for HR personnels. The framework aims to offer a structured approach for workplace coaches to help HR personnels navigate the effects of AI on the future of work.
JPMorgan graduates may soon have their training in the Metaverse
The American multinational financial services firm announced plans to implement immersive training on new hires, and integrate augmented and virtual reality into the daily lives of employees.
Investments
GBA Capital commits $10 billion to catalyse Web3 startups
The China venture capital firm aims to encourage innovation and growth in Web3 startups, offering support such as education training, capital, and investment incubation. This underscores the firm's vision to position the Guangdong-Hong Kong-Macao economic region as the world's meta-asset capital. The funds will fuel development of companies in the virtual reality, metaverse, non-fungible tokens, and real world asset tokenisation sector.
Norweigian startup raised $100M funding to bring humanoid robots into your living space
A humanoid robotics company, 1X Technologies, has raised funding from companies to support its mission in addressing global labour demand by producing user-friendly androids that can collaborate seamlessly with humans in the workplace, backed by Open AI.
Key regulatory developments
Europe agrees landmark AI regulation deal
The AI act attempts to regulate the development and use of AI in Europe to ensure that AI systems used in the EU are safe and comply with transparency requirements. Based on the risk category into which their technology fits, companies will face differing levels of restrictions.
Report on policy implications of the development of virtual worlds – civil, company, commercial and intellectual property law issues
The European Parliament aims to promote standardisation and interoperability for the full development of the metaverse, highlighting the main features of virtual worlds in this report.
Interesting reads
Meet the Omnivore: SiBORG Lab Elevates Approach to Accessibility Using OpenUSD and NVIDIA Omniverse
Integrating OpenUSD and Omniverse, SiBORG lab developed an open-source code that automatically generates interactive visual aids on human movement and interactions.
AI has won 2023, will the Metaverse win 2024?
The presence of generative artificial intelligence in different industries has rapidly increased in 2023, radically transforming the way organisations work. However, for artificial reality and virtual reality to achieve widespread adoption, there is still room for improvements in terms of visual graphics to truly mimic real-world experiences.
The Digital Revolution in Banking: Exploring the Future of Finance
Read about how innovation and digital disruption is transforming the banking industry. Financial institutions must embrace digital transformation and overcome the challenges of using technology, to remain competitive and meet the evolving needs of their customers.
Related PwC insights
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Global Investor Survey 2024
Discover key insights from PwC’s Global Investor Survey 2024. Explore trends, challenges and opportunities shaping investments worldwide.
How will GenAI transform the workforce?
The rapid advancement of generative AI is heralding a new era for workers—and charging leaders with a responsibility to navigate unprecedented opportunities. Listen now.
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Digital assets
Bitcoin (BTC) will soon effectively be listed on exchanges. Spot bitcoin exchange-traded funds (ETFs) will help make investing in the cryptocurrency more accessible, bringing more investors and assets into the crypto space. BTC ETF also offers investors exposure to the world's largest cryptocurrency without directly holding it.
Industry update
General market
Bitcoin ETFs approval: A game-changer for cryptocurrency market
The approval of spot Bitcoin Exchange Traded Funds by the U.S. Securities and Exchange Commission would enable investors to gain exposure to Bitcon's price movements without owning the asset directly, unlike existing futures ETFs that rely on future Bitcoin contracts.
Central Bank Digital Currency (CBDC)
The Monetary Authority of Singapore to start live wholesale Central Bank Digital Currency (CBDC) trials
The plan is part of a broader set of initiatives aimed at expanding trials of asset tokenisation, as part of its efforts to ensure a safe and innovative use of digital money in Singapore. The central bank aims to commence the development of CBDC for wholesale interbank settlement in 2024, which will target retail payments between commercial banks, with future test looking at cross-border settlements at a later stage.
Financial sector
BlackRock adoption of Bitcoin signals new era in global finance
The newly approved spot Bitcoin Exchange-Traded Fund (ETF), iShares Bitcoin Trust (IBIT) offered by Blackrock, saw about $400 million of inflows within 30 minutes of its trading debut. This would likely create more demand for spot Bitcoin ETFs which holds bitcoin as its primary asset, unlike futures ETFs that rely on future bitcoin contracts.
Funding
Crypto custodian Finoa raises $15 million in strategic funding round at flat valuation of $100 million
The Berlin-based cryptocurrency custody firm raised $15 million in funding after returning to profitability and unveiling a new custodial wallet service called FinoaConnect.
Non-fungible tokens (NFTs)
Biggest NFT stories of 2023: From Bitcoin ordinals to Blur's surge
The NFT market has experienced a transformative year with both positive and negative changes. Read about the defining NFT stories and trends in 2023 here.
Key regulatory developments
Most key global crypto markets tightening consumer protection rules, says report
In 2023, a majority of key markets in the global digital assets sector, including Singapore, have moved to tighten crypto regulations with nearly half of them tightening consumer protection measures.
Interesting reads
Elon Musk’s X Platform Phased Out NFT Profile Photo Features
The NFT integration on social media platform X has been phased out and will no longer enable premium users to display NTFs with click-in details as their profile photographs.
Related PwC insights
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Navigating the Global Crypto Landscape with PwC: 2024 Outlook
The report provides an overview of the global regulatory landscape, how the regulatory frameworks are developing across the world, and the impact on crypto and traditional financial services firms.
PwC Global CBDC Index and Stablecoin Overview 2023
This report provides the 2023 maturity ranking of global CBDC projects and an overview of the latest stablecoin developments.
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Emerging regulatory trends
The Monetary Authority of Singapore (MAS) has raised the bar on risk management of outsourced services to further enhance the resiliency of Singapore's financial services sector, with the release of Notice 658, Notice 1121, and updated guidelines for outsourcing. The development is also in line with global trends on third party risk management.
Key regulatory developments
MAS Guidelines on Outsourcing (Banks)
The Monetary Authority of Singapore has updated its guidelines and set out expectations in relation to the risk management practices of outsourcing arrangements. These guidelines are effective on 11 December 2024.
MAS Notice 658 and 1121 - Management of Outsourced Relevant Services for Banks and Merchant Banks
The Notices are effective on 11 December 2024 and included specific requirements around "material ongoing outsourced relevant services" and "outsourced relevant services that involve the disclosure of customer information".
MAS Consultation Paper on Proposals to Mandate Reference Checks
The MAS has published its responses and sets out its finalised policy stance on the requirement for financial institutions to conduct mandatory reference checks on prospective employees.
MAS Consultation Paper on Proposed Enhancements to the Policy Owners’ Protection Scheme in Singapore
The MAS seeks views on the proposed changes to the Policy Owner's Protection Scheme to enhance its coverage, simplify its design, and improve its operational efficacy.
MAS Consultation Paper on the Notice relating to FI-FI information sharing for AML/CFT
The MAS seeks views on the proposed notice that sets out MAS' further requirements relating to sharing of information through COSMIC, which stands for “Collaborative Sharing of Money Laundering/Terrorism Financing (ML/TF) Information & Cases”, along with related amendments to MAS Notice 626.
MAS Consultation Paper on the Regulations Relating to FI-FI Information Sharing for AML/CFT
The MAS invites comments on the scope of the term "relevant party" under proposed regulations, whose information may be shared via COSMIC for AML/CFT purposes.
Industry developments
Third party risk management
Financial Stability Oversight Council identifies third parties and AI as top organisational risk
While third parties can offer significant benefits to financial institutions, it can also reduce a firm's direct control over activities and may introduce new risks or increase existing risks. Artificial intelligence is identified as a risk for the first time by the Financial Stability Oversight Council.
Gartner Survey finds 45% of organisations experienced third party-related business interruptions over the past two years
The survey findings have identified four key actions actions to increase effectiveness in managing third-party cybersecurity risk.
Artificial intelligence (AI)
MAS Partners Industry to develop Generative AI (GenAI) risk framework for the financial sector
Project MindForge aims to develop a risk framework for the responsible use of generative artificial intelligence in the financial sector which seeks to catalyse GenAI-powered innovation to solve common industry-wide challenges and enhance risk management.
Singapore pioneers S$70m flagship AI initiative to develop Southeast Asia’s first large language model ecosystem catering to the region’s diverse culture and languages
A cornerstone of this initiative is the development of multimodal and localised large language models to understand context and values related to the diverse cultures and languages of Sout-east Asia.
First of its kind Generative AI evaluation Sandbox for trusted AI by AI Verify Foundation and IMDA
Over 10 global players are participating in the Sandbox, bringing global ecosystem players together through concrete use cases, to enable the evaluation of trusted artificial intelligence products.
Weighing risk and reward with Generative AI vendor selection
Beyond the due diligence on data privacy, security and compliance, companies should also evaluate training data used, copyright, added value and model independence when choosing generative AI vendors.
Others
MAS Financial Stability Review 2023
The Financial Stability Review presents MAS’s assessment of the resilience of Singapore’s financial system, against the global risks and domestic vulnerabilities.
MAS imposes civil penalty of $3.9m on Credit Suisse AG for misconduct by its relationship managers
Civil penalty was imposed by MAS after the bank failed to prevent or detect misconduct by its relationship managers. Credit Suisse has since strengthened its internal controls.
Related PwC insights
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Release of MAS Outsourcing Notices for banks and merchant banks
What banks and merchant banks need to know about Notice 658 and Notice 1121.
Move fast, think slow: GenAI for financial services
Discover how financial services organisations are moving forward with generative AI in the race to enhance efficiency, customer experience, and services.
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