In brief
On Oct. 29, MAS issued a reminder that banks must identify and manage environmental risks from haze, pollution and deforestation. Banks are urged to use National Environment Agency data, engage with high-risk customers and consider stricter terms or withdrawal for clear breaches of environmental law. The guidance follows recent haze episodes and new regulatory measures to curb haze activities.
On Oct. 29, Singapore’s MAS issued a reminder to banks to assess and manage environmental risks arising from their activities, especially those linked to haze, pollution and deforestation. Banks are expected to use information released by the National Environment Agency under the Transboundary Haze Pollution Act and consider imposing conditions or limiting exposure on problematic customers.
Where clients may be linked to activities contributing to haze, banks should engage them to understand their involvement and assess whether adequate measures are in place to prevent, detect and stop fires. Banks should take appropriate steps to mitigate heightened environmental risks, including adjusting financing terms, limiting further exposure or reassessing customer relationships.
"Clear breaches of environmental laws would warrant stronger measures, including limiting exposures or exiting the relationship," MAS said.
The guidance follows prolonged haze episodes in Singapore in recent weeks, during which the National Environment Agency issued Preventive Measure Notices under the Transboundary Haze Pollution Act to companies suspected of contributing to haze. MAS noted that it supports local banks’ clear stance against burning practices and will take strong action where warranted.
Bankers are urged to review their exposure to high-risk environmental practices and, where necessary, engage customers to improve compliance. The move signals a tightening of regulatory expectations around environmental stewardship in the banking sector.
