NUS, Northern Trust and UOB collaborate to launch market-first initiative aimed at tokenising green bond credentials

NUS, Northern Trust and UOB announce groundbreaking collaboration to launch first-in-market initiative to tokenise green bond credentials

NUS becomes the first university in Singapore to implement blockchain technology for environmental, social, and governance (ESG) reporting

This initiative marks a key milestone in green finance innovation, leveraging blockchain technology to enhance transparency, data integrity, and investor confidence in sustainable investment practices.

In line with market best practice, issuers of green bonds provide regular updates to investors on the use of funds. Investors, in turn, may require such data for their own sustainability reporting obligations and to assess their progress towards their ESG goals.

Under this initiative, Northern Trust will leverage its cutting-edge Matrix Zenith digital assets platform to mint and hold a green bond reporting token. The token will carry the environmental impact reporting data from NUS' third green bond, issued in 2023. As the lead arranger of the bond issuance, UOB will solicit and provide critical feedback on how the tokenised data can enhance investors' sustainability reporting practices.

The tokenisation process will focus on ensuring data integrity, providing investors with confidence that the environmental impact reporting data is secure, immutable, and reliable for their own sustainability reporting obligations. Investors in the bond will receive the same complete set of information, which will remain unchanged even as the bond changes hands. This initiative marks a significant step toward aligning green finance practices with global transparency and regulatory standards.

The tokenisation of NUS' green bond credentials is part of Project Guardian, a global collaboration between policymakers and key industry players, led by the Monetary Authority of Singapore, to enhance the liquidity and efficiency of financial markets through asset tokenisation. It falls under the fixed income workstream of Project Guardian, which focuses on demonstrating the benefits of tokenising bonds and other fixed income securities.

Collaborative expertise

Mr Tan Kian Woo, Senior Vice President and Chief Finance Officer at NUS, said: "We are proud to be leading this first-in-market green bond reporting tokenisation initiative in partnership with Northern Trust and UOB. This project is a significant milestone in our ongoing commitment to advancing green finance innovation. By creating a token that enhances the integrity and transparency of our environmental data, we aim to provide greater confidence to investors, helping them meet their sustainability reporting goals. This is only the beginning, as we continue to push boundaries in sustainable financial practices."

Mr Koh Yan Leng, Vice President (Campus Infrastructure) at NUS, said: "In our pursuit of driving campus decarbonisation, we are equally committed to reporting the sustainability performance of our green buildings in a transparent, timely and reliable manner. Through this project, investors and stakeholders will get access to prompt updates to support their sustainability reporting needs. It also reflects NUS' ongoing efforts to optimise energy use and reduce carbon emissions across our campuses."

Mr Justin Chapman, Global Head of Digital Assets and Financial Markets at Northern Trust, said: "This initiative is a testament to the transformative potential of blockchain technology in green finance. By leveraging our Matrix Zenith platform, we are ensuring the integrity and transparency of green bond reporting data, addressing critical needs for investors while paving the way for a more sustainable financial ecosystem."

Mr Edmund Leong, Head of Group Investment Banking at UOB, said: "At UOB, we are committed to driving sustainable finance solutions that meet the evolving needs of our clients. By participating in this data tokenisation initiative, we aim to provide real-world feedback on the usability of tokenised data, ensuring that it meets the standards required for transparent and reliable sustainability reporting."

Driving green finance innovation

The green bond reporting token is the first step in NUS' broader strategy to explore how blockchain technology can enhance green finance practices through a three-year Memorandum of Understanding (MoU) signed with Northern Trust in November 2024. The collaboration will focus on fostering cutting-edge research and developing actionable solutions to address the challenges of ESG finance.

As part of its commitment to lead green finance innovation, NUS will continue to explore opportunities for leveraging tokenisation to improve transparency, accountability, and impact in the sustainable finance sector.