Singapore central bank: environmental risk management ‘a matter of urgency’

The Monetary Authority of Singapore (MAS) has published a set of information papers examining how financial institutions (FIs) should address environmental risk. The papers are an outcome of reviews conducted by MAS, Singapore’s Central Bank, in 2021 that looked into how banks, insurers and asset managers are engaging with environmental risk. According to the MAS, environmental risk management is a matter of urgency and must be adapted to the FI's size, activities and risk profile. The MAS argued that "FIs should also pay attention to the impact of their efforts on business strategies and risks, as well as on the financial system and the broader transition to a sustainable economy. For example, indiscriminate credit withdrawal by banks from sectors deemed to be of higher climate-related risks would impact companies with credible transition plans, increasing the risk of stranded assets and a disorderly transition".