The Guidelines set the expectations for asset managers (“AMs”) to manage the transition and physical risks they and their portfolios face from climate change. The Guidelines will take effect from September 2027 and are an addendum to the Guidelines on Environmental Risk Management issued in 2020. AMs should implement the Guidelines in a way that is commensurate with the size, nature and risk profile of their activities.
AMs are expected to implement internal processes that (a) Adequately addresses their climate related risks, and (b) Facilitates climate-related risk management, including risk mitigating actions and adaptation measures, by investee companies.
The Guidelines apply to AMs which have discretionary authority over the investment portfolios. AMs still retain overall responsibility for investment management delegated to sub-managers or advisors. AMs may take guidance from their Group’s transition planning as long as it meets the Guideline’s expectations.
In summary, MAS expects AMs to assess and manage the risks associated with both physical and transition risks arising from climate change by adapting their business models, governance and risk management practices in a forward-looking manner. From a stewardship perspective, AMS should engage their customers and investee companies to better understand the climate-related risks they face and their management of such risks, so as to avoid the indiscriminate withdrawal of credit, insurance coverage, or investments, and support broader financial stability. AMs should keep pace with the development of knowledge and capabilities relating to the measurement and management of climate-related risks, as data and methodologies around the understanding of such risks continue to improve.
For the full details, refer to https://www.mas.gov.sg/regulation/circulars/fas-19_2025.
Disclaimer: The information, views or opinions expressed are provided for general information and should not be relied upon as legal or professional advice.