Banks expected to manage environmental risks from activities & exposures: MAS

The Monetary Authority of Singapore (MAS) announced in an Oct. 28 media statement that it expects banks to identify, assess, manage and monitor material environmental risks arising from their activities and exposures, including risks associated with pollution and deforestation.

In doing so, banks are also expected to take into consideration relevant information released by the National Environment Agency (NEA) under the Transboundary Haze Pollution Act (THPA).

Clear stance

MAS said that where customers may be linked to activities contributing to haze, banks should engage them and obtain sufficient information to understand their role and involvement, including whether adequate measures are in place to prevent, detect and stop fires.

Where heightened environmental risks are identified, banks should take appropriate measures to mitigate the risks, it added.

These may include imposing conditions, reviewing financing terms, limiting further exposures or reassessing the customer relationship.

Clear breaches of environmental laws would warrant stronger measures, including limiting exposures or exiting the relationship.

The statement added that MAS supports the local banks' clear stance against burning practices and notes that they will take strong action where warranted.

Expectations

MAS' expectations are set out in the Guidelines on Environmental Risk Management issued in 2020, and further elaborated in the Guidelines on Transition Planning issued in March 2026.

In light of the current situation, MAS has reinforced these supervisory expectations with banks, according to the statement.

Senior leaders of companies

An earlier report mentioned that the 10 Singapore-based companies that have been served legal notices by the National Environment Agency (NEA) over haze links have all acknowledged their receipt.

On Oct. 28, the following ministers met with senior leaders of the 10 Singapore-based companies served legal notices over the transboundary haze:

• Senior Minister, Coordinating Minister for National Security and Minister for Home Affairs K Shanmugam,
• Deputy Prime Minister and Minister for Energy, Trade and Industry Gan Kim Yong, and;
• Minister for Sustainability and the Environment and Minister-in-charge of Trade Relations Grace Fu.

During the meeting, SM Shanmugam outlined what the government expects of the companies and how they will be assessed under the notices.

"I have asked to meet you personally because the haze situation is serious. We want to be clear about the government's position. And what we expect from each of you."

Fu also shared that the government also intends to table amendments to the Transboundary Haze Pollution Act (THPA) in Parliament in November.

The 10 firms involved are:

• ⁠Asia Pulp & Paper Company Limited
• Asia Pulp & Paper Company (China) Limited
• Bumitama Agri Ltd
• Golden Agri International Pte Ltd
• First Resources Ltd
• Indofood Agri Resources Ltd
• Kencana Agri Ltd
• TSH Global Plantation Pte Ltd
• TSH Oversea Pte Ltd
• Wilmar International Ltd

All were represented at the meeting, with eight representatives present, as Asia Pulp & Paper (APP) and TSH Global Plantation and TSH Oversea each shared representatives across their entities.

Joint task force

In addition, Singapore and Indonesia will set up a joint task force to hold companies accountable for forest fires.

The initiative was announced by Indonesian Foreign Minister Arrmanatha Nasir following talks with Singapore foreign minister Vivian Balakrishnan on Oct 27 at a joint press conference.

In announcing the proposed task force, Arrmanatha said that "smoke can cross borders, so can money", which is why he said it was important to follow the money trail these companies leave behind.

Arrmanatha said the they discussed establishing a joint task force on "strengthening business responsibility".

He said the proposed task force would facilitate information sharing, financial intelligence and cross-border evidence gathering with, and when possible, asset recovery.

Transboundary Haze Pollution Act (THPA)

Separately, Environment Minister Grace Fu said at the Sustainable Procurement Forum on Oct. 27 that the government is reviewing the effectiveness of the THPA, and will amend it or introduce new laws where necessary.

This would address enforcement gaps, strengthen corporate accountability, and improve Singapore's ability to investigate and take action against those responsible for transboundary haze, she added.

Fu also noted that Singapore is also prepared to use a wider range of legal, regulatory and economic measures.

Where those responsible for the haze have interests in Singapore, scrutiny can come from regulators, investors, financiers and the market, she said.

This has already prompted companies to respond publicly and set out their positions.

She added that companies are accountable not only to regulators, as investors, customers and the public increasingly expect responsible environmental practices.

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