Managing Director's Foreword

How the world responds to the climate challenge over the next 10 years will determine the future of generations to come.  Global greenhouse emissions must come down 45% by 2030 and reach net zero around 2050 to keep global warming to within 1.5 degrees Celsius above pre-industrial levels and avoid the most severe effects of climate change.

Singapore is firmly committed to doing its part in the global effort to reduce greenhouse gas emissions and mitigate climate change.  In fact, environmental sustainability has always been integral to Singapore’s development. Singapore was one of the first countries in the world to limit its car population and to collect every drop of used water for recycling purposes, and has embedded greenery in its urban landscape since the 1960s.

Earlier this year, the government launched the Singapore Green Plan, which sets out a comprehensive road map towards sustainable development, a green economy, and net zero emissions.  The Green Plan sets targets to quadruple solar energy deployment by 2025, reach peak carbon emissions in the public sector by 2025, phase out diesel and less energy efficient cars from 2030, and plant a million trees by 2030. 

Climate change poses a significant threat to the financial sector.  At the same time, the financial sector plays a critical role in the fight against climate change.  Finance is key to unlocking a sustainable future, by supporting the transition to a less carbon intensive economy and channelling capital to green technologies and infrastructure.

This is why MAS is incorporating climate change and environmental sustainability across all its roles and functions.

  • As central bank and financial regulator, MAS will work with financial institutions to strengthen the Singapore financial sector’s resilience to environmental risks.
  • As promoter of Singapore as an international financial centre, we will work with financial institutions to develop a vibrant green finance ecosystem to support Asia’s transition to a low-carbon future.
  • As the guardian of Singapore’s official foreign reserves, MAS will integrate climate risks and opportunities into our investment framework.
  • As an organisation, MAS will reduce its own carbon and environmental footprint to support Singapore’s broader climate ambitions and commitments. 

We are incorporating environmental risk in our supervisory assessment of regulated financial institutions in Singapore. The Environmental Risk Management Guidelines issued last year set out MAS’ expectations for financial institutions, to assess, monitor, mitigate and disclose environmental risks. We are working towards conducting industry stress tests using a range of climate scenarios to further understand the risk posed by climate change to the financial system.

We are supporting the growth of green bonds and sustainability-linked loans through our grant schemes and attracting green investment funds by providing them mandates for sustainable investment. We are working with private sector partners to develop the ecosystem for trading carbon credits generated by nature-based solutions in South East Asia. We are anchoring in Singapore Asia-focused sustainability research capabilities and working with industry to build a pipeline of green finance professionals.

We are developing a roadmap of actions to make MAS’ reserves portfolio climate-resilient. We are requiring the external managers who invest our funds to integrate sustainability considerations into their investment process.  This includes exercising active stewardship, implementing climate risk mitigation strategies for the equities portfolio, and allocating more investments to actively managed strategies that seek out climate change related opportunities or tilt investments towards more climate-resilient companies. 

We are monitoring our own carbon footprint as an organisation, tracking the usage of electricity, water and paper, and optimising the energy and water efficiency of our office premises.  We are promoting the adoption of electronic payments in Singapore that will help to slow the demand for physical currency, whose production and processing have significant environmental impact. Most importantly, we are fostering a culture of sustainability across the organisation where our staff are motivated to adopt resource saving measures and co-create innovative solutions as part of MAS’ sustainability journey.

Internationally, MAS is actively working with our central bank peers and regulators to shape global standards on climate and sustainability disclosures and harmonisation of national and regional taxonomies. MAS is one of the eight founding members of the Network for Greening the Financial System and chairs the workstream to set out best practice supervisory expectations on climate and environmental risk management and disclosures by financial institutions. MAS is co-leading a technical expert group under the IOSCO Sustainable Finance Task Force on assessing a prototype climate reporting template for corporates. Closer to home, MAS and our central bank peers in ASEAN have jointly developed the ASEAN Green, Social and Sustainability Bond standards.

Just as MAS holds the financial sector to account for its efforts to support a green economy, MAS believes it too is accountable for the financial sector’s progress and its own efforts in facilitating a lower carbon future.  This inaugural Sustainability Report brings together the efforts that MAS is undertaking through its different roles to contribute towards a climate resilient and environmentally sustainable world.

We aim to lead by example, and we hope that financial institutions in Singapore and Asia will follow.

Ravi Menon
Managing Director
Monetary Authority of Singapore