Singapore's financial regulator and central bank is allocating funds from Singapore's official foreign reserves (OFR) to climate-related investment opportunities.

The Monetary Authority of Singapore (MAS) will deploy $1.8 billion to five asset managers appointed under its Green Investment Programme (GIP) to manage new equity and fixed income mandates focused on climate change and the environment, Ravi Menon, MAS managing director, said on Friday.

The asset managers, which were not named, will establish their Asia Pacific sustainability hubs in Singapore and launch new ESG thematic funds for the Asia Pacific region, Menon said at the at launch of the inaugural «MAS Sustainability Report.»

Climate Resilient Portfolio

MAS manages the OFR with the mandate of preserving purchasing power and long-term value of the OFR. It has looked at the potential impact of climate change on the OFR over a 20-year horizon, and is developing a climate sign-posting toolkit to help it understand the most likely transition pathways, and is developing a climate risk overlay programme for its equity portfolio.

MAS said it expect its external fund managers to be more active stewards of the companies they invest in, particularly on climate-related matters, and that it would report every year its progress in strengthening the climate resilience of the OFR.

As of May 2021, the OFR stands at $398 billion, according to «The Business Times.»

Green Push

Launched in 2019, the GIP is a major prong of the regulator's Green Finance Action Plan and aims to enhance the climate resilience of the OFR, attract sustainability-focused asset managers to Singapore; and catalyze funding towards environmentally sustainable projects in Asia and beyond.

As part of its green push, MAS and the Singapore Exchange (SGX) will set out roadmaps for mandatory climate-related financial disclosures by financial institutions and listed entities respectively. 

At the same time, SGX will consult the industry on making climate-related reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), while MAS said it would consult the industry later this year on mandatory climate-related disclosures by financial institutions.

«Every Bit Counts»

«The coming green revolution will involve all segments of the economy and society – governments, businesses, and individuals will all need to do their part. Everyone must contribute. Every bit counts,» Menon said.