The Monetary Authority of Singapore (MAS) has released its comprehensive Code of Conduct (CoC) for Environmental, Social, and Governance (ESG) rating and data product providers.

This release, accompanied by a self-attestation checklist, marks the culmination of a public consultation process that spanned from June to August 2023.

The CoC is designed to set baseline industry standards focusing on transparency in methodologies and data sources, governance, and management of conflicts of interest.

These standards are aligned with the International Organisation of Securities Commissions’ (IOSCO) recommendations. The move has been met with strong support from industry stakeholders, who acknowledge the importance of these standards in ensuring the reliability and independence of ESG products.

MAS is urging providers to publicly disclose their adoption of the CoC and to publish their completed checklist within 12 months of the CoC’s publication.

To facilitate this, the MAS has collaborated with the International Capital Market Association (ICMA) to feature a list of compliant providers on ICMA’s website. This initiative aims to make it easier for users to identify providers adhering to these new standards.

MAS said that it intends to keep a close eye on both the industry and global regulatory changes, suggesting that further enhancements to the regulatory framework for ESG providers might be considered in the future.

Detailed information about the CoC and the checklist, as well as MAS’ responses to the public consultation are available on MAS’ website.

Lim Tuang Lee, Assistant Managing Director (Capital Markets), MAS said,

“The Code of Conduct will help build market confidence in the use of ESG rating and data products. Its baseline transparency standards for rating methodologies and data sources will improve the comparability of ratings and data products.

The code also encourages disclosures on how forward-looking elements are considered in such products, which will improve investors’ assessments of investee entities’ responses to transition risks and opportunities. Overall, the Code will support informed decision making by investors keen on funding the climate transition.”

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• Source: https://fintechnews.sg/81789/green-fintech/mas-unveils-code-of-conduct-to-bolster-confidence-in-esg-ratings-and-data/