In brief
On 29 October 2026, Singapore's Monetary Authority of Singapore (MAS) urged banks to identify, assess and manage environmental risks tied to haze, pollution and deforestation. The guidance calls on banks to use data from the National Environment Agency, impose conditions or limit exposure to customers linked to haze-causing activities, and to take stronger action when companies breach environmental laws. The move follows recent haze episodes and the enforcement of the Transboundary Haze Pollution Act.
On 29 October 2026, Singapore’s Monetary Authority of Singapore (MAS) released a statement urging local banks to identify, assess and manage material environmental risks arising from their activities, particularly those linked to haze, pollution and deforestation. In the statement, MAS emphasised that banks should consider information published by the National Environment Agency (NEA) under the Transboundary Haze Pollution Act when evaluating their customers and exposures.
MAS instructed banks to engage with customers who may be involved in activities that contribute to haze and to verify whether the customers have adequate fire prevention, detection and suppression measures in place. The central bank stated that banks should take “appropriate steps to mitigate heightened environmental risks, including imposing conditions, reviewing financing terms, limiting further exposure or reassessing customer relationships.”
Operational changes for Singapore banks
Under the guidance, banks are encouraged to incorporate NEA data into their environmental risk assessments. Those activities that pose a high risk of contributing to haze are singled out, and banks are advised to consider imposing stricter financing conditions or reducing the exposure to high‑risk customers. The guidance follows the NEA’s issuance of Preventive Measure Notices under the Transboundary Haze Pollution Act to companies that may have contributed to the haze.
MAS added that “Clear breaches of environmental laws would warrant stronger measures, including limiting exposures or exiting the relationship.”
MAS said in a statement on Wednesday that clear breaches of environmental laws would warrant stronger measures, including limiting exposures or exiting the relationship.In light of recent haze episodes, MAS highlighted that it fully supports local banks’ stance against illegal burning practices and will take strong action where warranted.
Singapore’s recent haze wave, lasting several weeks, has drawn heightened scrutiny to the environmental risks carried by the financial sector. The NEA’s preventive measure notices target companies that exceed emission thresholds and have in the past been linked to uncontrolled burning. The MAS guidance seeks to align financial risk management with environmental compliance, ensuring that banks are not inadvertently financing activities that generate haze.
By integrating environmental risk considerations into credit and financing decisions, MAS aims to reduce the constructive contribution of Singapore’s banking sector to regional haze and to promote a greener financial ecosystem. Banks that comply with the new directive will demonstrate their commitment to environmental stewardship and strengthen the resilience of the city’s economic system against the growing threat of climate‑related risks.
