As one of the nations currently driving sustainability, Singapore is a major contributor to a more sustainable global economy. Under the direction and guidance of the Monetary Authority of Singapore (MAS), financial institutions based and operating in the country must meet a range of requirements according to existing regulations and recent developments.
What are the MAS ESG Disclosure Requirements?
MAS ESG guidelines are regularly updated as sector- and industry-wide practices and needs evolve. Due to the growing number of ESG-focused investment schemes and funds offered in Singapore, MAS has established a series of regulations designed to reduce the risk of greenwashing. These are laid out in the Code on Collective Investment Schemes (“CIS Code”) and the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations (“SF(CIS)R”) and were most recently updated in Circular No. CFC 02/2022.
Under the Third Schedule of the SF(CIS)R, a series of required disclosures are detailed, which must be included in any prospectus for ESG-related financial products. These requirements include:
Investment Focus
Prospectuses must describe the ESG focus of the scheme in question, whether it’s a reduction of greenhouse gas emissions or general climate change and sustainability. It’s also necessary to describe the relevant ESG criteria, methodologies, or metrics used to measure the attainment of the scheme’s ESG focus.
Investment Strategy
The creators of the scheme must include a description of the investing strategy used to
achieve the ESG focus, the key elements and principles of that strategy, and how the strategy will be continuously implemented. It’s also necessary to list any relevant ESG criteria, metrics, or principles and the minimum asset allocation into assets used to attain the scheme’s ESG focus.
Reference Benchmark
If a scheme uses a benchmark index to monitor progress in achieving its ESG goals, the prospectus must explain the relevance of that benchmark to the investment focus. You must also indicate whether you plan to use a benchmark index for financial performance alone.
Risks
Finally, your prospectus must describe any risks associated with the scheme.
These changes take effect from 1 January 2023 and will apply to any and all ESG-focused financial products or funds proposed for release in Singaporean markets.
Recent Developments in MAS ESG Reporting
As part of the effort to integrate ESG-focused financial schemes and services, MAS and SGX Group have announced the launch of the ESGenome Disclosure Portal as one of four digital platforms under Project Greenprint. ESGenome allows companies to report additional disclosures aligned with recognised standards and frameworks according to varying materiality and business needs, including:
- The Task Force on Climate-Related Financial Disclosures (TCFD)
- The Global Reporting Initiative (GRI)
- The UN’s Sustainable Development Goals (SDGs)
Project Greenprint was established to foster the growth of a green FinTech ecosystem based on reliable sustainability data. Other initiatives under the umbrella of the project include:
- ESGpedia — a registry of green certifications
- Greenprint Marketplace — a forum for Green Technology providers to network and connect with corporations, financial institutions, and potential investors
- Greenprint Data Orchestrator — a group of data platforms that provide access to trustworthy ESG and sectoral sources
Another recent development is the launch of the MAS ESG Impact Hub, or simply “the Hub”. It’s a community established to facilitate collaboration and cooperation between financial technology companies, financial institutions, and other stakeholders. The ultimate aim of the Hub is to further the integration of ESG standards and metrics throughout Singapore’s financial sector and the economy as a whole.
Convene ESG: The Resource You Need to Comply with MAS ESG Guidelines
As one of the most proactive ESG environments in the world, Singapore’s ever-evolving reporting requirements can be a challenge to keep up with. MAS ESG reporting standards must be adhered to in order for companies to gain the trust of their various stakeholders. With Convene ESG, companies of all sizes and in all industries can create flawless, precise reports that meet MAS ESG requirements.
Convene ESG incorporates a selection of convenient, easy-to-use tools and features, including performance monitoring and benchmarking, and automated data compilation. Combined with expert recommendations on report creation and compliance, Convene ESG is a valuable resource in successful ESG reporting.
Ready to learn more about Convene ESG? Discover here how Convene ESG can help you comply with the requirements for MAS ESG in Singapore.
