Strengthening Financial Sector Resilience to Environmental Risks
MAS encourages development of climate risk assessment capabilities through industry-wide stress test
6 December 2021
MAS shared plans to incorporate a range of long-term climate scenarios as part of the 2022 Industry-Wide Stress Test exercise. The exercise will raise awareness of the potential economic and financial implications of climate risks, and serve to inform both MAS and financial institutions (FIs) of the knowledge and data requirements as we collectively develop capabilities in this area.
The long-term climate scenarios will take reference from scenarios developed by the Network for Greening the Financial System (NGFS). MAS will also incorporate feedback from FIs. These scenarios will include pathways featuring (i) an orderly transition, (ii) a disorderly transition, and (iii) no additional policy action, to capture a range of physical and transition risks that could arise due to climate change. Findings from the exercise will be published in MAS’ Financial Stability Review 2022.
Launch of industry standard template for banks to engage corporate clients on environmental risk issues
21 April 2022
MAS collaborated with the Green Finance Industry Taskforce (GFIT) and Association of Banks in Singapore (ABS) to develop a standardised Environmental Risk Questionnaire for FIs to obtain common key risk data from clients in a way that is comparable across clients and fit-for-purpose to facilitate financing decisions. This questionnaire provides a baseline to guide FIs’ client-level risk assessment on environmental risks, and helps to establish a best practice for banks in Singapore to engage their clients in assessment and mitigation of their environmental risks. There are plans to develop subsequent and more advanced versions of the questionnaire, as well as to digitalise the process in future.
MAS publishes information papers on environmental risk management for banks, insurers and asset managers
31 May 2022
MAS published information papers on environmental risk management for banks, insurers and asset managers. The papers, based on a thematic review conducted by MAS in 2021, provide an overview of the progress made by selected FIs in implementing the MAS Guidelines on Environmental Risk Management. The papers also highlight emerging and good practices by FIs and identify areas where further work is needed.