Improving the quality of disclosures is vital to supporting the growth of green finance in Singapore. In this regard, the Green Finance Industry Taskforce ("GFIT") issued an implementation guide for climate-related disclosures by financial institutions ("FIs") on 19 May 2021 ("Guide"). The Guide details the best practices that are aligned with the recommendations of the Financial Stability Board's Task Force on Climate-Related Financial Disclosures ("TCFD").
As background, FIs are expected to make regular and meaningful disclosure of salient environmental risks applicable to their businesses. This is set out, amongst others, in the Monetary Authority of Singapore (MAS) Guidelines on Environmental Risk Management for banks, asset managers, and insurers ("ENRM Guidelines") issued in December 2020. In addition, FIs which are listed on the Singapore Exchange Securities Trading Limited (SGX-ST) are subject to mandatory sustainability reporting, with the primary components prescribed in the SGX Listing Rules to be included in reports on a "comply or explain" basis for listed issuers for their financial year ending on or after 31 December 2017.
By focusing on climate-related disclosures, the Guide supplements the ENRM Guidelines as well as GFIT's handbook that provides practical implementation guidance and good practices on environmental risk management. The Guide is relevant to FIs which are expected to meet the expectations of the ENRM Guidelines, namely, banks, asset managers, and insurers.
Presently, there are several standards and frameworks for sustainability reporting for various purposes that FIs may use as appropriate, such as the Global Reporting Initiative, the International Integrated Reporting Council and the TCFD. The Guide serves as a reference for FIs in making disclosures according to their chosen standard or framework.
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