The Monetary Authority of Singapore (MAS) has released new guidelines to help banks, insurers, and asset managers address environmental risks linked to climate change. These guidelines, announced on 5 March 2026, aim to enhance the resilience of financial institutions (FIs) by improving their risk assessment and management capabilities. The guidelines will become effective in September 2027, following an 18-month transition period.
The guidelines require FIs to assess and manage both physical and transition risks associated with climate change. This involves adapting business models, governance, and risk management practices in a forward-looking manner. Additionally, FIs are encouraged to engage with customers and investee companies to understand and manage climate-related risks, thereby avoiding indiscriminate withdrawal of financial services and supporting financial stability.
MAS Deputy Managing Director, Ho Hern Shin, emphasised the importance of these guidelines, stating, “These guidelines support FIs in building their risk management capabilities in response to both physical and transition risks. The financial sector plays an important role in supporting customers as they navigate the risks from climate change.”
The guidelines are tailored to the specific business models of banks, insurers, and asset managers, incorporating feedback from a prior public consultation. This initiative underscores MAS’s commitment to fostering a robust financial sector capable of withstanding climate-related challenges.
