The MAS-convened Green Finance Industry Taskforce, or GFIT, issued a detailed implementation guide for climate-related disclosures by financial institutions. The Taskforce also published a whitepaper that outlines recommendations and lays out a roadmap for scaling green finance in the real estate, infrastructure, fund management, and transition sectors; these include a green securitization platform to scale sustainable infrastructure investments in the region and recommendations for the use of transition bonds and loans in certain sectors, to support more sustainable practices.
The guide on implementing climate-related disclosures sets out best practices that are aligned with the recommendations of the FSB's Task Force on Climate-Related Financial Disclosures (TCFD). The guide outlines disclosure practices for the banking, insurance, and asset management sectors. In each industry, recommendations are presented in line with the TCFD framework, which is divided into the four pillars—governance, strategy, risk management and metrics and targets—and 11 supporting recommended disclosures. For each key recommendation under the TCFD framework, three levels of reporting maturity have been identified to propose a pathway for reporting excellence. The pathway is represented by Type A disclosures, Type B disclosures and Type C disclosures, in order of increasing reporting maturity. Type A disclosures generally represent disclosures that most financial institutions have taken as a first step in reporting. Type B disclosures generally comprise more extensive or involved disclosures. Type C disclosures generally represent "best in class" reporting to date, which financial institutions may aim to achieve over time. The guide is not intended to be a disclosure standard or reporting framework. Rather, this guide is a practical reference document to assist financial institutions in preparing their disclosures, regardless of the standard or framework they use.
The Taskforce has also published the framework for green trade finance and working capital, which provides a principles-based approach for banks to assess eligible green trade finance transactions and specific guidance on recommended industry certifications for trade finance activities to qualify as green. Guided by this framework, HSBC and UOB [United Overseas Bank] have piloted four green trade finance transactions for renewable energy, recycling, agriculture, and farming activities, to support businesses in greening their supply chains. Another initiative from the Taskforce is a series of workshops for financial institutions and corporates, from May 2021 to April 2022, to build capacity in green finance. These programs aim to strengthen the capabilities of banks, insurers, and asset managers in environmental risk management, enhance their environment-related disclosures, deepen knowledge of green finance instruments, and enable financial institutions and corporates to customize green financing solutions for transition sectors.
The Green Finance Industry Taskforce, convened by MAS, comprises representatives from financial institutions, corporates, non-governmental organizations,, and financial industry associations. Its mandate is to help accelerate the development of green finance through four key initiatives: develop a taxonomy, enhance environmental risk management practices of financial institutions, improve disclosures, and foster green finance solutions. In January 2021, the Taskforce had proposed aand launched an environmental risk management .
Keywords: Asia Pacific, Singapore, Banking, Insurance, Securities, Climate Change Risk, ESG, TCFD, Disclosures, Reporting, GFIT, Sustainable Finance, MAS
Previous ArticlePRA Sets Out Strategic Work Priorities for 2021-22
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.