Featured Product

    MAS Taskforce Proposes Green Taxonomy, Issues Risk Management Handbook

    January 28, 2021

    The Green Finance Industry Taskforce (GFIT or the Taskforce) of MAS proposed the taxonomy for Singapore-based financial institutions to identify and classify activities that can be considered green or transitioning toward green. The comment period on this consultation will end on March 11, 2021. The Taskforce also launched a handbook on implementing environmental risk management for asset managers, banks, and insurers. In addition, the Taskforce is exploring technology solutions for financial institutions to enhance the quality of their climate-related disclosures. The Taskforce aims to pilot innovations that seek to solve the challenges in mobilizing green finance across sectors. These resources will complement the taxonomy and handbook.

    Consultation on green and transition taxonomy

    The consultation seeks feedback on the Taskforce's recommendations on the environmental objectives, focus sectors, and a “traffic-light” system, which sets out how activities can be classified as green, yellow (transition), or red according to their level of alignment with environmental objectives. The consultation discusses the merits of a taxonomy for Singapore-based financial institutions, with particular relevance to those active across ASEAN, sets out a basic approach to a taxonomy, identifies economic sectors important to Singapore and Association of Southeast Asian Nations (ASEAN) and that would particularly benefit from such classification, and poses follow-up questions. The consultation provides an introduction to the directional design of a taxonomy. It discusses the environmental objectives of the taxonomy, the sectors that may be covered, the economic activities within those sectors, and the general approach to classification.

    The key purpose of developing a green taxonomy for Singapore-based financial institutions is to encourage the flow of capital to support the low-carbon transition needed to avoid catastrophic climate change and to support the environmental objectives of Singapore and the ASEAN nations, which are serviced by Singapore-based financial institutions. Compared to other taxonomies, a key feature of the proposed taxonomy is that it encompasses transition activities that allow for a progressive shift toward greater sustainability while taking into account starting positions and supporting inclusive economic and social development. The taxonomy references international best practices and adapts them to the Asian context where relevant. The Green Finance Industry Taskforce will develop, in its next phase of work, a combination of principle-based criteria and quantifiable thresholds for activities. This will provide clarity and ease the implementation of the taxonomy by financial institutions.

    Handbook on implementing environmental risk management

    The handbook on implementation of environmental risk management outlines the financial risks arising from environmental risks, the various transmission channels, and the need for a green taxonomy to help financial institutions play a key role in directing capital flows toward sustainable economic activities. The handbook also focuses on effective integration and implementation of environmental risks into the governance framework for financial institutions. Good practices in environmental risk governance include board accountability and oversight, clear delineation of roles and responsibilities for senior management, integration of environmental risk into risk frameworks and policies, board approved risk appetite, and reporting metrics and capacity building. The handbook outlines the steps that financial institutions can take to embed environmental and climate-related financial risk into their risk management processes, make informed decisions, and improve their resilience. The handbook also showcases case studies of effective environmental and climate-related financial disclosures. Effective disclosures allow financial institutions to provide greater transparency on the impact of financially material environmental risks on their business.

     

    Comment Due Date: March 11, 2021

    Keywords: Asia Pacific, Singapore, Banking, Insurance, Securities, ESG, Climate Change Risk, Climate-Related Disclosures, Disclosures, Reporting, GFIT, Sustainable Finance, Sustainable Taxonomy, MAS

    Featured Experts
    Related Articles
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7868