Credible Transition Plans

Credible transition plans by financial institutions (FIs) will be fundamental in catalysing action needed to achieve a net zero economy. FIs are key to ensuring an orderly transition to net zero and to strengthening the resilience of the financial system, as they have a strong nexus in the broader economy through loans and other financing flows.

To support FIs' adoption of science-based transition plans, the Monetary Authority of Singapore (MAS) is engaging international partners to support the development of credible regional sectoral decarbonisation pathways. FIs can reference these pathways when they set emissions reduction targets and when they engage with their clients on initiatives to decarbonise their businesses.

MAS will also continue to work with international industry alliances, such as the Glasgow Financial Alliance for Net Zero (GFANZ), to support FIs in their transition planning and learn from early-adopter FIs that have started on their transition planning journeys.

MAS wants to do more to encourage and support FIs in their transition planning journeys. We have made clear that FIs should engage with their clients to support credible transition efforts, rather than opt for divestment, as the first choice. Initiating conversations with clients around the impact of climate change on their businesses and their response to climate change can prompt action towards the creation and acceleration of clients' own transition planning efforts.