Singapore issues ESG Funds Disclosure and Reporting Guidelines

The Monetary Authority of Singapore, which is Singapore’s central bank and integrated financial regulator, issued a Circular on 28 July 2022 detailing the Disclosure and Reporting Guidelines for Retail ESG Funds. The new guidelines will take effect on 1 January 2023.

A brief summary of the new Circular is as follows.

  1. Objective

The objective of the new circular is to mitigate the risk of greenwashing by facilitating greater comparability in the disclosures made by retail ESG funds. This will in turn help investors in making better informed investment decisions.

  1. Scope of the Circular

The new guidelines are applicable to all Funds that use or include ESG factors as their key investment focus and strategy. Sustainable investment strategies like impact investing and ESG inclusion investing that includes broad or thematic strategies fall within the purview of the new guidelines. Negative ESG screening, or incorporation (or integration) of ESG considerations only for financial returns would not be regarded as ESG investment focus.

  1. Name of ESG Fund

When a Scheme (or Fund) includes or uses ESG-related or similar terms (e.g. “sustainable”, “green”) in its name, the scheme should reflect such an ESG focus in its investment portfolio and/or strategy in “a substantial manner”, which will assessed based on whether the scheme’s net asset value is primarily invested in accordance with the scheme’s investment strategy.

According to MAS, “a scheme is normally considered to be “primarily invested” if at least two-thirds of the scheme’s net asset value is invested in accordance with the scheme’s investment strategy”. In cases of exceptions related to determining the “primarily invested” requirement, the manager has to explain how the scheme’s investments are substantially ESG-focused.

  1. Disclosure requirements

MAS requires disclosures at two levels – upfront, and recurring. The upfront disclosures are to be included in the Prospectus of the Scheme and the recurring disclosures should appear in the annual reports of the ESG funds.

4.1 Prospectus – Upfront disclosures

A typical scheme’s prospectus should contain its investment objective, focus, approach, and investment risks. An ESG fund should make similar disclosures, which are explained as below.

  • Investment focus which could include climate change, low carbon footprint, sustainability, reduction in greenhouse gas emissions, and the “relevant ESG criteria, methodologies or metrics used to measure the attainment of the scheme’s ESG focus”.
  • Investment strategy which includes a description of the sustainable investing strategy, its implementation plan, the ESG Investment criteria, metrics or principles considered investment selection process and the minimum asset allocation into assets to meet the ESG focus of the scheme.
  • In case a Reference benchmark or Index is used, how the reference benchmark is consistent with or relevant to its investment focus.
  • Risks associated with the scheme’s ESG focus and investment strategy

4.2 Annual reports – Recurring disclosures

The annual report of an ESG Fund should disclose the level of achievement of the scheme’s ESG focus, the actual proportion of investments that meet the scheme’s ESG focus and action taken in attaining the scheme’s ESG focus.

Additional information on how the ES focus is measured and monitored, disclosures on data availability and quality, and other relevant issues should be disclosed as appropriate.


The new disclosure and reporting guidelines for Retail ESG Funds by MAS is a very important step in combating greenwashing and further build confidence in the tiny, prosperous country’s financial system and serves as a model for other countries to emulate.

The full circular can be accessed here.

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About NordESG

NordESG is an advisory firm helping corporates develop, articulate and execute their ESG and sustainability strategies. Our work includes sustainability performance reporting support under various ESG frameworks, strategy development or conducting materiality assessments. By doing so, we help businesses meet their disclosure compliance requirements like CSRD but also help them proactively communicate their strategy to other stakeholders like investors, customers and local communities in which they operate. Our work is focused mainly on Europe and North America. You can get in touch by e-mail or book a free discovery call by following this link.