On July 28, 2022, the Monetary Authority of Singapore (the “MAS“) published a circular (the “Circular”) on new disclosure and reporting guidelines for retail ESG funds in Singapore. The Circular was published alongside a Sustainability Report 2021/2022 issued by MAS and coincides with the issuance of Singapore’s first green bond (which was announced here). Pursuant to the Circular, retail ESG funds are required to provide details on their investment strategies, criteria and metrics used to select investments, and risks and limitations associated with the funds’ strategies. The Circular will take effect on January 1, 2023.
The Circular is published in the midst of a growing investor interest in ESG-related investment products in Singapore. The Circular intends to mitigate the risk of greenwashing, where investments are falsely or misleadingly claimed as environmentally sound, and to help investors make more informed investment decisions. According to Ravi Menon, the managing director of MAS, the new disclosures will need to be made on an ongoing basis, and the relevant ESG funds are required to publish annual reports detailing how their ESG focus in investments or strategy has been achieved.
The Circular forms part of the series of actions by the Singapore authorities to change the ESG reporting landscape in Singapore, which we discussed here.