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Singapore’s MAS issues disclosure and reporting guidelines for retail ESG funds

01 August 2022

The Monetary Authority of Singapore (“MAS”), has issued circular 02/2022 setting out guidelines further to the Code on Collective Investment Schemes and the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations in their application to retail ESG funds, and the disclosure and reporting guidelines applicable to these funds.


Who this applies to

  • All holders of a capital markets services licence in respect of fund management ;
  • Trustees approved under Section 289 of the Securities and Futures Act.


The guidelines aim to mitigate the risk of greenwashing and expectation with regards to the existing requirements under the Code on Collective Investment Schemes (“CIS Code”) and the

Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations (“SF(CIS)R”) apply to retail ESG funds, and the disclosure and reporting guidelines applicable to these funds.

The guidelines will facilitate:

  • greater comparability in the disclosures made by retailESG funds;
  • investors to make more informed investment decisions.

ESG funds in scope

Authorised or recognised scheme (“ESG Fund”) which:

(a) uses or includes ESG factors as its key investment focus and strategy. This means that ESG factors significantly influence the scheme’s selection of investment assets; and

(b) represents itself as an ESG-focused scheme.

Significantly influences

Common strategies where ESG factors significantly influence a scheme’s selection of investment assets include:

  • impact investing; and
  • ESG inclusionary investing (including broad or thematic strategies).

Not an ESG investment focus


Where a scheme that only uses negative screening, or a scheme that merely incorporates or integrates ESG considerations into its investment process to seek financial returns, would not be regarded as having an ESG investment focus.

ESG Fund Name

Where a scheme’s name includes or uses ESG-related or similar terms (e.g., “sustainable”, “green”), the scheme should reflect such an ESG focus in its investment portfolio and/or strategy in a substantial manner and comply with the guidelines in the Circular.

Clear, Fair and Not Misleading Name and associated considerations


If a scheme’s name uses a term which is considered by MAS to be ESG-related but does not comply with the guidelines under this Circular, the name will be deemed inappropriate.

Investment is substantially focussed on ESG

In assessing whether a scheme’s investment portfolio and/or strategy is focused on ESG in a substantial manner, MAS will consider factors including:

  • whether the scheme’s net asset value is primarily invested in accordance with the scheme’s investment strategy;
  • As a guide, 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.

Disclosure requirements


As per the SF(CIS)R, the scheme’s prospectus should disclose its:

  • investment objective;
  • focus and approach;
  • the risks of investing in the scheme.

Prospectus Disclosure required

The scheme prospectus should disclose the following:

(a) Investment focus

i. the scheme’s ESG focus (e.g., climate change, low carbon footprint, sustainability, reduction in greenhouse gas emissions);

ii. the relevant ESG criteria, methodologies or metrics (e.g., third-party or proprietary ratings, labels, certifications) used to measure the attainment of the scheme’s ESG focus.

(b) Investment strategy

i. a description of the sustainable investing strategy used by the scheme to achieve its ESG focus, the binding elements of that strategy in the investment process, and how the strategy is implemented in the investment process on a continuous basis;

ii. any relevant ESG criteria, metrics or principles considered in the investment selection process (e.g., a climate-focused fund may use climate-related indicators such as carbon footprint, weighted average carbon intensity, greenhouse gas emissions and exposure to carbon-related assets);

iii. the minimum asset allocation into assets used to attain the ESG focus of the scheme.

(c) Reference benchmark

i. where the scheme uses a benchmark index to measure the attainment of its ESG focus, an explanation of how the benchmark index is consistent with or relevant to its investment focus;

ii. where the scheme uses a benchmark index for financial performance measurement only, a statement of that fact; and

(d) Risks

i. risks associated with the scheme’s ESG focus and investment strategy (e.g., concentration in investments with a certain ESG focus, limitations of methodology and data, lack of universal ESG standards or taxonomy, or reliance on third party information sources).

ESG-related terms used in the prospectus should be clearly defined.

Enhanced reporting and disclosures Annual reports

The annual report of an ESG Fund should disclose the following:

(a) a narrative on how and the extent to which the scheme’s ESG focus has been met during the financial period, including a comparison with the previous period (if any);

(b) the actual proportion of investments that meet the scheme’s ESG focus (if applicable); and

(c) any action taken by the scheme in attaining the scheme’s ESG focus (e.g., stakeholder engagement activities).

Additional information

Additional information may be relevant on the following areas regarding an ESG Fund:

  • its manager or index provider should be disclosed to investors or prospective investors on the manager’s website or by other appropriate means;
  • how the ESG focus is measured and monitored;
  • the related internal or external control mechanisms that are in place to monitor compliance with the scheme’s ESG focus on a continuous basis (including methodologies used to measure the attainment of the scheme’s ESG focus, if any);
  • sources and usage of ESG data or any assumptions made where data is lacking;
  • due diligence carried out in respect of the ESG-related features of the scheme’s investments; and
  • any stakeholder engagement policies (including proxy voting) that can help shape corporate behaviour of companies that the scheme invests in and contribute to the attainment of the scheme’s ESG focus.

Recognition of schemes

UCITS schemes which fall within the scope of ESG Funds as defined in this circular will be deemed to have complied with the disclosure requirements if they are classified as falling under Article 8 or 9 of EU’s Sustainable Finance Disclosure Regulation.

Notwithstanding the application of Article 8 or 9 of the SFDR, the name of the UCITS scheme should still comply with the requirements of the MAS Circular.

Implementation Date


This Circular will take effect on 1 January 2023

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