https://www.mas.gov.sg/news/speeches/2020/harnessing-the-power-of-finance-for-a-sustainable-future  1/13  14/10/2020  “Harnessing the Power of Finance for a Sustainable Future”- Keynote Speech by Mr Ravi Menon, Managing Director, MAS, at the Finan…  As we look to building a more resilient world emerging from COVID-19, we have an opportunity to also make it more sustainable. Resilience and sustainability are complementary. By improving environmental health and safeguarding biodiversity, we also strengthen public health. If resilience requires us to adopt a more decentralised way of living and working, there is opportunity to reduce the carbon footprint of daily commutes. Reducing waste and recycling resources not only enhances sustainability but also strengthens resilience. ASIA’S TRANSITION TO DEEPER SHADES OF GREEN  Asia accounts for about half of global greenhouse gas emissions. To move the needle on global emissions, Asia must move. But Asia’s journey towards a low-carbon future will be diﬀerent from that of Europe. Asia is at a diﬀerent stage of development – millions of people still do not have access to electricity, modern sanitation, and drinking water. Demand for aﬀordable energy will continue to grow strongly, especially with rapid urbanisation and modernisation. Most countries in Asia are still heavily dependent on fossil fuels for their energy needs. More than 80% of Southeast Asia’s current and planned fossil fuel generation assets exceed the carbon budget under the Paris Agreement. [1] It is not realistic to suddenly replace fossil fuels with renewables. Asia cannot move quickly to a European standard of green without curtailing its economic and social development.

They should develop specific risk mitigation policies for sectors posing higher environmental risks and support the transition of riskier customers and investee companies towards sustainable business practices. They should disclose their approach to managing environmental risks and the impact of these risks on their financial performance. Disclosure should reference internationally accepted reporting frameworks, such as those by the FSB Taskforce on Climate-related Financial Disclosures (TCFD). MAS will assess environmental risk in our supervision of financial institutions. This will include assessing how financial institutions integrate environmental risk management with their business operations. Within the next two years, MAS will incorporate climate-related scenarios in our annual stress tests for the financial industry. Disclosure of environmental risk applies as much to non-financial corporates. https://www.mas.gov.sg/news/speeches/2020/harnessing-the-power-of-finance-for-a-sustainable-future  6/13  14/10/2020  “Harnessing the Power of Finance for a Sustainable Future”- Keynote Speech by Mr Ravi Menon, Managing Director, MAS, at the Finan…  Only then can investors price climate-related risks and opportunities and asset managers construct and manage sustainable portfolios for their clients. The Singapore Exchange (SGX) requires listed companies to produce annual sustainability reports on a comply-or-explain basis. SGX will soon include the TCFD recommendations within its existing guidance to assist listed companies with their climate-related financial disclosures. As a central bank and financial regulator, MAS will practise what it preaches. MAS has begun to evaluate the resilience of its Oﬀicial Foreign Reserves under a range of short-term climate-related disruptions and longer-term climate scenarios.