How Singapore Attracts Green Investment

Achieving Sustainable Development Goals (SDGs) is not easy. Besides strong governance and robust collaborations, sustainable development needs a lot of money. Thus, a country needs to create a desirable investment climate that aligns with the SDGs roadmap. Singapore has been one of the leading countries in Asia’s equity market’s green revenue share. How does Singapore attract green investment?

Singapore’s Legal Certainty

Despite the limitation in natural resources and land area, Singapore’s sustainable development progress has been noteworthy. At the end of December 2024, Singapore reached 10.9% green revenue share in the Straits Times Index (STI), which surpassed global averages of 8.6%.

There are several reasons why Singapore has been successful in attracting global equity investors; one of them is legal certainty. Legal certainty is defined as the degree of predictability and stability of the legal framework and regulations. A study shows that foreign investors often prioritize countries with robust legal frameworks.

Singapore has a stable and consistent legal system that attracts investors and businesses. Below are some core areas of Singapore’s legal framework that encourage and support sustainable, healthy, and green investment:

• Robust anti-corruption laws, which have strong implications on economic and political stability
• The protection of intellectual property rights
• The adoption of international standard laws, which promotes efficient business dispute resolution

From Commitment to Strategic Plan

Besides the legal certainty, the Singaporean government also attracts green investment due to its sustainability strategies. From tourism to energy, the country seems to be taking significant steps toward achieving SDGs.

Launched in February 2021, Singapore Green Plan 2030 has been the main reason for Singapore’s growth in green investment, as it showcases the country’s strong commitment to sustainable development. Through this action plan, Singapore introduced themselves as pioneers in technology and policy solutions for sustainable development, standing out among Southeast Asia’s emerging economies. The plan has 5 pillars as the country’s focus: city in nature, energy reset, sustainable living, green economy, and resilient future.

Singapore also has a strategy that focuses specifically on green investment.  The Monetary Authority of Singapore (MAS) has predicted that ASEAN needs around US$200 billion per year of sustainable financing by 2030. To grab this opportunity, Singapore has established itself as a leading hub for sustainable finance in Asia through the Singapore Green Finance Centre (SGFC). This initiative offers educational and research programs in sustainable finance and sustainable development. In addition, it develops a robust banking system, a strong regulatory framework, and a talent pool of financial professionals.

Furthermore, Singapore’s appointment of the first Government Chief Sustainability Officer showed the country’s political will in sustainable development. These strategic plans communicate that Singapore is serious in its ambition to become a green growth hub.

Encouraging Green Investment

Ultimately, Singapore’s strong legal certainty and strategic plans with sustainability at its core make it a compelling destination for green investment from foreign investors. Sustainable financing is a crucial aspect in sustainable development as it enables the realization of plans into meaningful actions. In this light, Singapore presents a possibility and lessons learned, especially for other governments from growing economies in the neighboring countries, that economic development and sustainability can and should go hand-in-hand.

Editor: Nazalea Kusuma & Kresentia Madina