Starting next year, banks in Singapore will have to undergo stress tests and make regulatory disclosure to ensure the management of climate and other environmental risks.
Markets have attracted trillions of dollars in the name of improving environmental, social and governance-related factors but increasing scrutiny has been placed on those that have lured demand through misleading or false claims, otherwise known as greenwashing.
In addition to stress tests and disclosure requirements, MAS’ managing director Ravi Menon also underlined requirements for data verification through the use of technology to confirm the provenance of green products, according to a «Bloomberg» interview.
Palm Oil
When asked about curbing palm oil – a major source of pollution for Singapore that creates significant seasonal haze for the city-state and neighboring countries – Menon said, stressing that the regulator never pronouncements on any specific sector.
«These are issues we study closely,» he said, adding that the financial sector can support the transition by financing greener alternatives.
«You don't want to rush to say 'this activity is brown, and you should not invest in it, or you should not make loans to finance it’.»
