Building Financial System Resilience to Environmental Risks
MAS would work closely with financial institutions (FIs) to include environmental risks as part of their risk management processes and overall strategic planning
This move would lead to a better understanding of the possible impact of environmental risks on Singapore’s financial system and improve FIs’ resilience against environmental events.
MAS issued a public consultation on Environmental Risk Management guidelines across the banking, insurance, and asset management sectors in June 2020. The guidelines set standards on governance, risk management and disclosures of environmental risk and would help bring about the right-pricing of loans and investments, and thereby promote new opportunities for green investments.
MAS encouraged FIs to stress test for climate-related risks
In the 2018 Industry-Wide Stress Test, MAS asked insurers to consider the impact of a scenario featuring extreme flooding on their balance sheets arising from damage to insured properties and higher claims. MAS would be incorporating a broader range of climate-related risks as part of a future Industry-Wide Stress Test.