GFIT Handbook for Implementing Environmental Risk Management for Banks, Insurers, Asset Managers

On 28 January 2021, the Green Finance Industry Taskforce (“GFIT“) issued a handbook titled “Handbook on Implementing Environmental Risk Management” (“Handbook“) providing financial institutions (“FIs“) with practical implementation guidance and good practices on environmental risk management.

The Handbook complements the three sets of Monetary Authority of Singapore (“MAS“) Guidelines on Environmental Risk Management (collectively, “ENRM Guidelines“) issued in December 2020. For details on the ENRM Guidelines, refer to our December 2020 Client Update titled “MAS Issues Environmental Risk Management Guidelines for Banks, Insurers and Asset Managers”.

The Handbook applies to the FIs that are subject to the ENRM Guidelines: 

1. all banks, merchant banks and finance companies; 
2. insurers (including reinsurers); and 
3. fund management companies and real estate investment trust managers.

This Update gives an overview of selected key implementation recommendations described in the Handbook, focusing on the following main areas: 

• Governance and Strategy to ensure, among other things, board accountability and oversight; 
• Proper risk management to entrench environmental and climate-related financial risk in FIs’ risk management and decision-making processes; and 
• Effective environmental and climate-related financial disclosures.