To facilitate transition planning processes, the Monetary Authority of Singapore (“MAS“) issued a set of three Consultation Papers proposing guidelines on transition planning (“TP Guidelines“) respectively for banks, insurers and asset managers as they build climate resilience and enable robust climate mitigation and adaptation by customers and (where relevant) asset managers and investee companies. Transition planning refers to the internal strategic planning and risk management processes undertaken to prepare for both risks and potential changes in business models associated with the transition.
Key aspects of the respective TP Guidelines follow similar broad themes under MAS’ Guidelines on Environmental Risk Management, which include governance and strategy, risk and portfolio management, the use of data and metrics (including the setting of decarbonisation targets), implementation strategy, as well as disclosure. The TP Guidelines for insurers also address underwriting and investment aspects. The TP Guidelines for asset managers also address engagement and stewardship. In terms of implementation, MAS proposes a transition period of 12 months after the relevant TP Guidelines are issued for the FIs to assess and implement the TP Guidelines as appropriate. Comments to the Consultation Papers must be submitted to MAS by 18 December 2023.
This Update outlines the salient aspects of the proposed TP Guidelines for banks, insurers, and asset managers, along with our comments.
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