MAS, as Singapore’s integrated financial regulator, is responsible for well-functioning financial markets and fostering a sound financial sector through its prudential oversight of financial institutions (FIs) in Singapore.

MAS has progressively integrated environmental risk into its supervisory framework and processes at the individual firm and system-wide levels. MAS will continue its efforts to

1. uplift environmental risk management practices of FIs through ongoing supervision and industry partnership,
2. deepen climate risk assessment capabilities through climate scenario analysis, and
3. enhance environmental and climate-related disclosure standards  to promote market transparency.

MAS set out supervisory expectations around effective governance, robust risk management, and meaningful disclosure of environmental-related risks through the issuance of the Guidelines on Environmental Risk Management to FIs (ENRM Guidelines) in December 2020.

In March 2026, MAS issued the Guidelines on Environmental Risk Management - Transition Planning (TPG) as an addendum to the ENRM Guidelines. The TPG provides further guidance for FIs to manage the transition and physical risks arising from climate change as part of a sound transition planning process.

Additional Resources:

• Information Paper on Environmental Risk Management for Banks (677.2 KB), Insurers (539.7 KB), and Asset Managers (634.3 KB), published by MAS in May 2022. The papers provided an overview of the environmental risk management practices of selected FIs and their progress in implementing the ENRM Guidelines. It also identified emerging and/or good environmental risk management practices, and highlighted areas where further work is needed.
• ABS Environmental Risk Questionnaire (ERQ) , and ERQ Guide , issued in April 2022. Developed by the Green Finance Industry Taskforce (GFIT), the ERQ is the first industry-standard template that sets a consistent baseline for banks in Singapore to engage their corporate clients on environmental risk issues, gather data points, and identify opportunities to finance the transition to a low carbon economy.
• Handbook on Implementing Environmental Risk Management , issued by GFIT, in January 2021. The handbook offers guidance to banks, insurers, and asset managers on best practices in environmental risk management and supports the financial industry’s efforts to implement MAS’ Guidelines on Environmental Risk Management. 

Climate-related events and their associated risks are subject to significant uncertainty in terms of their timing, frequency, or severity. Given these uncertainties, stress testing and scenario analysis are useful tools for assessing the potential impact of climate risks on financial institutions and the broader economy.

1. 2018

   As part of the 2018 Industry-Wide Stress Test exercise, MAS subjected insurers to a scenario featuring extreme flooding in Singapore, and they had to consider the impact of higher claims on their balance sheets arising from damage to insured properties. 

   • For more details, please refer to the International Monetary Fund (IMF) Financial System Stability Assessment for Singapore, published on 15 July 2019.

2. 2022

   MAS has incorporated a range of long-term climate scenarios as part of the 2022 Industry-Wide Stress Test exercise. The exercise raised awareness of the potential economic and financial implications of climate risks, and will facilitate learning for both MAS and financial institutions as we collectively develop capabilities in this area. Findings from the exercise will be published in MAS’ Financial Stability Review 2022.