Banks in Singapore to Implement Responsible Financing
Banks in Singapore will for the first time be expected to disclose environmental, social and governance (ESG) policies for financing, under new industry guidelines set by the Association of Banks in Singapore (ABS) to advance responsible financing. ESG aspects include greenhouse gas emissions, labour standards and corporate integrity, which are indicators of sustainability and ethical impact of an investment or business.
ABS released the guidelines on Thursday 8 October 2015. The guidelines were developed since early 2015 in consultation with the banks ABS represents, which include 158 foreign banks and DBS, UOB and OCBC, the three largest local Singapore banks.
The Monetary Authority of Singapore has stated that it welcomes the guidelines, and will work with ABS to monitor the guidelines’ adoption and implementation.
ABS stated in their press release that “at the minimum, banks will share their vision and commitment on responsible financing in their annual reports, and publish their ESG policy framework in 12-18 months’ time”.
The guidelines comprise three principles:
i) Disclosure of senior management’s commitment,
iii) Capacity building
Disclosure of the senior management’s commitment to responsible financing is expected in banks’ 2015 Annual Report. To facilitate the implementation of these guidelines, banks will need to allocate resources for internal capacity building and skills development. ABS also hopes that banks will “implement robust governance systems through appropriate policies and procedures” to fully comply with the guidelines by 2017.
ABS advises banks to focus their responsible financing policies on industries with “elevated” risk, such as agriculture, chemicals, defence, energy especially oil, gas and coal, forestry, infrastructure, mining and metals, and waste management.
The Business Times: New guidelines soon to steer banks on responsible financing
ChannelNewsAsia: ABS releases guidelines on responsible financing