“Among Asian countries, we have a lot of so-called standards and frameworks, but everyone’s just developed their own–there’s no real standardisation across regions,” says Dr. Hao Liang, an associate professor of finance at Singapore Management University, who co-authored the research and sits on the management committee of the Singapore Green Finance Centre, a public-private partnership for ESG finance research that includes the MAS as well as top Singaporean and foreign banks.

“Our focus is to have something more transparent, more objective, and more standardised for the whole region,” he says. “We want to set standards from Singapore, not just for Singapore.”

Singapore’s financial track record and influence on regional policy will help it take that market-leading role in setting new standards, according to Liang. “If you want to be a sustainable financial centre, you need to be a financial centre first,” he says. “Singapore is well-positioned in that regard, serving the broader region–both ASEAN and China. We have the research quality on par with top schools worldwide, and you see more and more big companies setting up regional headquarters in Singapore.”

And while Asia has generally lagged Europe and the U.S. in establishing ESG standards, that’s also given Singapore an opportunity to learn from the rest of the world and localise more effective approaches.

“As a hub for Asian investment, one way for Singapore to improve the quality of ESG reporting is through a taxonomy on sustainability,” says Frédéric Ducoulombier, ESG director at Singapore-based research consultancy Scientific Beta.

Taxonomies would work by defining and classifying specific ESG-related activities and minimum thresholds that companies must meet to qualify as sustainable or ESG-compliant.

The EU and China already operate similar taxonomies, while ASEAN has recently released high-level principles to create “a common language and an overarching guide” for the development of such taxonomies by member states, according to Ducoulombier. Singapore and Malaysia have been amongst the first countries to put forward a taxonomy proposal. “More broadly, Singapore is investing significantly to make sustainability a core feature of its role and ambition as an international financial centre,” he observes. “A taxonomy supported by regulation promoting its usage could be an important piece of the puzzle.”