Forging ahead with the new MAS guidelines
As part of the vision to make Singapore the leading centre for green finance in Asia, the Monetary Authority of Singapore (MAS) has issued guidelines on environmental risk management for financial institutions (FIs), namely banks, asset managers and insurers.
In our quick read, we provide an overview on what the MAS guidelines mean for your business and how we can help you put in place robust environmental risk management policies and processes, bringing you a step closer to realising your sustainable future.
With the recent finalisation of the MAS guidelines on environmental risk management, insurers are given up till June 2022 to implement the expectations and demonstrate evidence of implementation progress. This is a new and complex area, and substantial work is required, given that most insurers are just beginning to integrate ESG and climate risks into their business and risk management processes.
In our recent webinar, we brought together specialists from PwC US, PwC Germany and PwC Singapore to share insights on how insurers can integrate ESG and climate risks into their business and risk management processes, how to develop your business’ climate strategy and the new revenue growth opportunities available to insurers in this arena.
From evolving consumer preferences and government regulation to extreme weather events, Environment, Social and Governance (ESG) and environmental risk management are becoming increasingly crucial topics for insurers across the globe. This is a new and complex area: substantial action is required, given that most insurers in the Asia-Pacific region are just beginning to integrate ESG into their business and risk management processes.
In our recent webinar, we brought together specialists from PwC US, PwC Germany, PwC Japan and PwC Singapore to share insights on how insurers can integrate ESG into their business and risk management processes, as well as how to develop your business’ climate strategy in the APAC region.
Banks, asset managers and insurers must integrate governance, risk management and disclosure of environmental risk within their existing risk assessment frameworks.
These guidelines aim to enhance the resilience of FIs to environmental risk and strengthen the role of Singapore’s financial sector in supporting the transition to an environmentally sustainable economy. FIs are given 18 months to assess and meet these guidelines.
The guidelines set out the MAS’ expectations for FIs in three main areas:
Effective oversight of the management of environmental risk by boards and senior management
Establishment of policies and processes to assess, monitor and manage environmental risk
As demand and stakeholders’ expectations for environmental, social and corporate governance (ESG) continue to rise, integrating environmental risks in your risk management framework is now more crucial than ever to building trust and driving your strategic agenda. It is essential to focus on developing and assessing the adequacy of your environmental risk management processes.
Our sustainability and climate change professionals can help you to:
Perform gap analysis of governance framework for managing environmental risks, including insights on standard industry practice. Plan for board and senior management training on environmental risks and related governance processes.
Conduct firm and portfolio level assessments (e.g. exposures to material environmental risk factors using agreed-upon benchmarks, carbon intensity calculations, quantify investments in climate positive sectors) as well as environmental scenario modelling and risk assessments.
Assess and propose enhancements on end-to-end environmental risk management framework and current environmental risk mitigation measures, analysis of environmental risk related metrics.
Perform gap analysis on Taskforce on Climate-related Financial Disclosures (TCFD) readiness, benchmarking of disclosures against peers and standard industry practice, gain clarity on environmental risks related data points for disclosure.