Singapore MAS Proposes Code of Conduct for Providers of ESG Ratings & Data Products, Minimum Standards, Data Sources & Conflict of Interests
28th June 2023 | Hong Kong
Singapore central bank Monetary Authority of Singapore (MAS) has launched a public consultation on an industry code of conduct for providers of ESG ratings & data products (Environmental, Social & Governance), including minimum industry standards of transparency in methodologies & data sources, governance, and management of conflicts of interest. Singapore MAS: “ESG ratings help provide an assessment of the impact of ESG factors on an entity. ESG data products provide information on the various ESG factors, customised to specific needs. As the integration of sustainability-related risks and opportunities into capital allocation decisions become increasingly mainstream, the use of ESG ratings and data products for investing and capital allocation has grown.” Interested parties are invited to submit their comments here by 22 August 2023 | More info below.
“ Singapore MAS Proposes Code of Conduct for Providers of ESG Ratings & Data Products, Minimum Standards, Data Sources & Conflict of Interests “
Lim Tuang Lee, Assistant Managing Director (Capital Markets), MAS: “The industry code of conduct will help give greater confidence to financial market participants using ESG ratings and data products. The call for product providers to disclose how forward-looking elements such as an entity’s transition plans are considered in their products, is critical for more accurate market pricing signals related to climate risks and opportunities.”
Singapore MAS Proposes Code of Conduct for Providers of ESG Ratings & Data Products, Minimum Standards, Data Sources & Conflict of Interests
28th Jun 2023 – The Monetary Authority of Singapore (MAS) today launched a public consultation on an industry code of conduct for providers of Environmental, Social, and Governance (ESG) ratings and data products. This is part of a proposed approach centred on an industry code of conduct that was co-created by MAS with industry players.
The proposed code of conduct establishes minimum industry standards of transparency in methodologies and data sources, governance, and management of conflicts of interest. MAS will monitor the implementation of the industry code and observe global developments before taking further steps to formalise a regulatory framework for ESG rating providers.
ESG ratings help provide an assessment of the impact of ESG factors on an entity. ESG data products provide information on the various ESG factors, customised to specific needs. As the integration of sustainability-related risks and opportunities into capital allocation decisions become increasingly mainstream, the use of ESG ratings and data products for investing and capital allocation has grown.
The industry is nascent and rapidly changing, and regulators globally are at various stages of developing regulatory approaches for these providers. The International Organization of Securities Commissions’ (IOSCO) Final Report on ESG Rating and Data Product Providers highlighted the lack of transparency of methodologies and data sources, governance and controls, as well as management of conflicts of interest as key areas of concern.
Co-created with ESG rating and data product providers, and modelled closely after IOSCO’s recommendations of good practices as set out in its “Call for Action” paper , the industry code of conduct would be a first step in establishing standards on the quality, reliability, and transparency of ESG ratings and data products in Singapore. Such an industry code is in line with our phased regulatory approach.
Interested parties are invited to submit their comments here by 22 August 2023.
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