#whatstrending feat. FTSE RussellEver wondered what is currently driving the local and regional markets? #whatstrending is a series addressing some of the most trending questions/topics on the markets for investors. Designed to be educational, expect to get factual information on what is driving sectors and stocks listed on SGX, featuring insights from professionals in the community.Today, we hear more from FTSE Russell’s Global Investment Research team. Lee Clements, Head of Applied Sustainable Investment Research, shares his thoughts on Singapore's role in the global green economy as the region's technology innovation and capital markets hub.Q1: How does Singapore’s green revenue share in the Straits Times Index (STI) compare to global averages and other Asian markets?From: Lee Clements, Head of Applied Sustainable Investment Research at FTSE Russell:

• The green economy exposure of Singapore’s best-known equity market benchmark, the STI, was 10.9% of market capitalisation at the end of December 2024, based on LSEG Green Revenues data. This revenue share is up from less than 4.2% in 2016. 18 companies in the 30-stock index had green revenues at end-2024, compared with only 7 companies in 2016.

• This level of green revenues exposure puts STI ahead of the global average of 8.6%. The Singapore equity market’s green revenues share also exceeds that of China, Hong Kong, South Korea, ASEAN countries Thailand and Malaysia, and India.

• Singapore has identified the green economy as a key area where it can generate growth and leverage its position as a key Asian hub. This goal is supported both by the Singapore Green Plan 2030 and the adoption of the Singapore-Asia Taxonomy for Sustainable Finance in late 2023.

Q2: Within the STI, which sectors stand out on the account of green revenue exposure?From: Lee Clements, Head of Applied Sustainable Investment Research at FTSE Russell:

• Energy transition is a key focus for Singapore’s green plans, with utility firms in the STI such as Keppel Corporation and Sembcorp Industries both involved in building and operating renewable energy-generating infrastructure. Aside from Singapore, these companies are also involved in the energy transition in other Asian countries where acute environmental pressures (e.g. urban air pollution) coincide with growing demand for power. 
   
• The build environment is also a key topic for sustainability-focused investors, with buildings representing around 20% of Singapore’s carbon emissions. The ICB Real Estate Industry represents 14.9% of the STI’s market capitalisation and it is where we find the 70% of the index’s overall green revenues. This is a sharp contrast to the global equity market, where most green revenues are derived from the ICB Industrials, Utilities and Technology industries. These three industries have relatively smaller weightings in the STI, compared with Real Estate or Financials.

• Other sectors include the development of the green shipping industry as a growing opportunity as Singapore plays a role as a global logistics hub. Shipbuilding and marine engineering companies, such as Yangzijiang Shipbuilding and Seatrium, are involved in the development of fuel-efficient and dual-fuel ships.
   
• Within the food industry, Singaporean agri-business companies like Wilmar International generate green revenues through their sustainable palm oil and biodiesel businesses. Other companies such as Singtel and ST Engineering are also developing technologies to make global diverse industries and processes more sustainable.

Click here to read the full report.Visit here for more resources on the STI, including list of index constituents and performance data.

For more insights from FTSE on the STI, visit here. Enjoying this read?

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