Banks are under rising regulatory and commercial pressure to protect themselves from the impact of climate change and to align with the global sustainability agenda. Banking regulators around the world, including MAS are now formalizing new rules for climate-risk management. This course aims to provide an introductory overview of the climate change regulatory agenda, as well as the regulatory and stakeholder expectations with regards to climate and environmental risk management and the impact of the environmental, sustainability, and governance (ESG) factors in the banks’ investment and lending decisions in response to the shifting attitudes towards “green” financing.
Course Objectives
- Have a better understanding of the driving forces and shifting attitudes towards ESG centric business activities
- Be more aware of the impact and consequence of climate change on business activities
- Be cognizant of the commercial imperatives for better climate-risk management, especially in a competitive environment in which banks are often judged on their green/ESG credentials
- Be aware and understand the regulatory expectations of how to incorporate climate factors into capital allocations, loan approvals, portfolio monitoring, and reporting
Course Outline
Module 1 Background – Climate Change & Impact
- Greenhouse Gas (GHG) Emissions and Global Warming
Module 2: Climate-Related Risks, Opportunities & Financial Impact (Focus on Banking Sector)
- Overview of Physical & Transition Risks
- Financial Intermediation
Module 3: Risks Arising from Climate Change – Focus on Physical and Transition Risks
- Physical Risks from Climate Change
- Examples of Physical Risk Impact on Commercial and Residential Real Estate
- Transition Risks from Climate Change
- Other Types of Risk Arising from Climate Change
Module 4: Supervisory & Regulatory Responses to Climate Change
- MAS Guidelines on Environmental Risk Management for Banks, Insurers and Asset Managers (FIs)
- What These Guidelines Mean for Your Business
- What then are these Key Environmental Risks?
- How then should FIs Manage these Risks?
- Overview of the Key Pillars of the Guidelines
- Scope of the Guidelines
- Enforcement of Guidelines
- Implications of Guidelines