In a blow to its green aspirations, Singapore – via its state-supported assets – has found itself on an environmental, social and governance (ESG) blacklist, alongside big carbon emitters like Russia, Saudi Arabia and China, the world’s current leader.

State-backed assets from Singapore have ended up on the blacklist of Dutch investment management firm Van Lanschot Kempen, which says the city-state has failed an updated ESG test used by the firm to screen for environmental risks.

“Singapore is falling behind due to its inefficient use of energy to protect the population from tropical heat,” states a report by firm, the oldest independent financial institution in the Netherlands, which adds that the city-state’s share of renewables in its energy mix fell between 2016 and 2021.

The US$130 billion Dutch asset manager’s actions, however, have been quickly rebuked by the city-state. In a statement jointly issued by Singapore’s National Climate Change Secretariat, its Ministry of Sustainability and Environment, Ministry of Trade and Industry and National Parks Board, the agencies declare that the country takes climate action seriously and reiterates its pledge to achieve net-zero emissions by 2050.

The statement also calls into question the asset manager’s claim that the share of renewables in Singapore’s energy mix fell between 2016 and 2021, labelling it as “inaccurate”.

“On the contrary, the share of renewable energy (solar) has increased during this period, from 0.17 per cent to 0.71 per cent,” the agencies note, while pointing out that the proportion is lower than larger countries due to Singapore’s limited land area.

Also, Singapore, the statement highlights, is the only country in Southeast Asia to implement a broad-based carbon tax that covers 80% of the city-state’s greenhouse gas emissions, which it stresses is a higher proportion than many countries in Europe.

And, on biodiversity, Singapore is dedicated to conservation efforts, the agencies argue, which include more than 2,000 plant, 400 bird, 250 hard coral and 35 mangrove species.

In its own response on the updated ESG screening test, Van Lanschot Kempen says in a statement: “The policy only applies to mandates used by some of our pension fund clients under our fiduciary management where ESG is further advanced; and it relates only to state-backed debt instruments and sovereign debt. The research is based on a proprietary methodology that pools data from a variety of academic institutions and non-government organizations."