MAS to set expectations on credible transition planning

The guidance will cover FIs governance frameworks in managing climate-related financial risks.

The Monetary Authority of Singapore is set to issue a consultation paper that sets supervisory expectations for financial institutions in their transition planning processes for the credible decarbonisation of their clients.

The guidance will cover financial institutions’ governance frameworks and client engagement processes to manage climate-related financial risks and  enable transition in the real economy towards net-zero, MAS said.

“Financial institutions should not indiscriminately de-risk from particular sectors, but instead carefully assess clients’ transition  plans and provide the needed financing for transition where the plans are credible,” MAS said in a statement.

MAS said that it will recognise that a short-term increase in their financed emissions may arise due to actions supporting longer term climate positive outcomes. 

MAS and other government agencies are also collaborating with industry players to explore platforms to channel blended finance at scale into transition and green infrastructure projects in the region. 

“MAS aims to bring together patient, concessionary capital from philanthropies, multilateral development  banks, development finance institutions, and donor partners. This will in turn help to crowd  in more conventional infrastructure financiers, including banks, and institutional investors,” the statement read.

Details will be announced when the plans are more developed.