Singapore’s central bank issued new disclosure and reporting guidelines on Thursday for retail environmental, social and governance (ESG) funds.
The measures, which include requiring funds to provide details on their investment strategy, will take effect from January next year, the Monetary Authority of Singapore (MAS) said.
“Some of the required information includes details on the ESG fund’s investment strategy, criteria and metrics used to select investments and risks and limitations associated with the fund’s strategy,” MAS chairman Ravi Menon said.
MAS will require the disclosures to be made regularly, he added. “Investors will receive annual updates on how well the fund has achieved its ESG focus.”
He said the new guidelines would help to reduce “greenwashing” risks and enable retail investors to better understand the ESG funds in which they invest.
Menon spoke at the launch of the MAS annual sustainability report.
“High-quality sustainability disclosure is critical to managing environmental risks and allocating capital to climate risk mitigation,” he said.
The Task Force on Climate-related Financial Disclosures (TCFD) has issued a set of recommendations for “clear, comparable, and consistent disclosures on climate related risks and opportunities”, Menon noted.
“The report is aligned with the TCFD recommendations [and is] one of the few central bank reports in the world to do so,” he added.
- George Russell, with Reuters