Singapore tops Asia in green equity exposure as the STI rises

Singapore's stock market is positioning itself as a frontrunner in green economy representation within Asia, as the Straits Times Index (STI) posted a green revenue share of 10.9% by the close of December 2024, as reported by FTSE Russell’s Global Investment Research team.

It exceeded the worldwide average of 8.6% and outperformed significant Asian markets, such as China, Hong Kong, South Korea, Thailand, Malaysia, and India. The green revenue share of the STI has increased over twofold since 2016, when it was at 4.2%.

By the end of 2024, 18 out of the 30 companies in the index reported green revenues, an increase from seven in 2016. The information is derived from the LSEG Green Revenues framework.

Lee Clements, who leads Applied Sustainable Investment Research at FTSE Russell, remarked that Singapore's advancement in the green economy corresponds with its long-term developmental objectives, such as the Singapore Green Plan 2030 and the implementation of the Singapore-Asia Taxonomy for Sustainable Finance in 2023.

The real estate industry also has a significant influence. Even though it constitutes 14.9% of the STI by market capitalization, it accounts for 70% of the index’s overall green revenues, primarily because of sustainability efforts in the built environment.

Worldwide, green revenues are primarily concentrated in the industrial, utility, and technology sectors. Conversely, Singapore’s green revenue exposure is focused on real estate and utilities, mirroring the STI's sector composition.