New rules will require Singaporean investors to develop climate scenario analysis capabilities and engage portfolio companies over climate change risks, while debtors lagging on environmental risk management may see their borrowing costs increase.
The Monetary Authority of Singapore (MAS), the island state’s de facto central bank, has published a framework to manage environmental risks, which it expects to be adopted by the financial institutions it regulates.
The draft guidelines introduce enhanced disclosure requirements that would see lenders, insurers and investors report their exposure and policies with regards to sectors with high environmental risks, and develop scenario analysis capabilities to assess organisational resilience to climate change. Disclosures should be made on the basis of the Task Force on Climate related Financial Disclosures recommendations, said MAS.
The guidelines stipulate that lenders and insurers should cons…