Singapore’s central bank has allocated $ 1.8 billion to five asset managers as part of measures to protect its portfolio from climate change risks and to support the city-state’s efforts to promote eco-friendly projects of the environment.
Climate change and other environmental issues are a top priority for many governments, and financial regulators are also changing the rules to require companies to better disclose their environmental impact.
In a press conference on Wednesday, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said the funds came from Singapore’s official foreign exchange reserves as part of the bank’s green investment program. central.
“We aim to reduce the risks to the portfolio in different climate scenarios, to seize the investment opportunities of the transition to a low carbon future and to support the transition of the companies in the portfolio,” he said. .
MAS officials said the asset managers, whose names were not disclosed, will manage new equity and fixed income mandates focused on climate change and the environment. They will also set up Asia-Pacific sustainable development hubs in Singapore and launch new regional thematic environmental, social and governance funds.
“This is just the start, there is more to come,” Menon said.
While outlining the central bank’s first annual sustainability report, Menon said MAS will stress test the financial sector by the end of 2022 under a range of climate change scenarios. .
On Tuesday, the Bank of England launched its climate stress tests for banks and insurers following the world’s first climate stress test organized by the Banque de France. Read more
Menon said MAS will consult with industry later this year on mandatory climate-related disclosures by banks, insurers and asset managers to align them to a single international standard.
“Data is the biggest challenge and the biggest obstacle to green finance. This is the biggest obstacle to meaningful disclosures, ”Menon said.
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