MAS Transition Planning Guidelines: What Financial Institutions Need to Do Before September 2027
In March 2026, the Monetary Authority of Singapore (MAS) released its Transition Planning Guidelines (TPG), supplementing the Environmental Risk Management (ENRM) Guidelines released in 2020 for financial institutions.
By September 2027, financial institutions, including banks, asset managers, and insurers, are expected to demonstrate that transition planning is not merely a sustainability initiative, but an embedded capability supported by governance, data, and risk management processes.
What This Means for Financial Institutions
For financial institutions, the TPG marks an important shift in regulatory expectations from climate risk awareness to implementation.
While many financial institutions have already established environmental risk management frameworks, MAS is now placing greater emphasis on whether these activities are embedded into core processes and capable of informing business decisions.
In practice, this goes beyond sustainability reporting and requires climate considerations to be integrated into the way institutions lend, underwrite, invest, and allocate capital. Importantly, the MAS is not asking financial institutions to publish transition plans; it is asking them to demonstrate that transition planning capabilities are operational.
While specific requirements differ across banks, insurers, and asset managers, MAS’ expectations for all three sectors can be grouped into five key areas:
| Governance and Strategic Oversight | Boards and senior management must actively oversee climate risks and consider their implications for business strategy, portfolio management and risk appetite. |
Forward-Looking Risk Assessment | Institutions are expected to move beyond qualitative assessments and develop capabilities such as climate scenario analysis and stress testing. |
Data, Metrics, | Institutions should establish a clear data strategy, including governance over the use of proxy data where direct information is unavailable. |
Counterparty Engagement | Institutions are expected to understand how counterparties are managing climate risks and incorporate those insights into their own risk assessments. |
People, Processes, and Systems | Relationship managers, investment professionals, underwriters and risk teams must have the skills, tools, and processes needed to assess and manage climate-related risks effectively. |
MAS recognises that financial institutions differ in size, complexity and exposure to climate-related risks. Accordingly, transition planning capabilities should be implemented in a manner that is proportionate to an institution's risk profile and business activities. Larger or more climate-exposed institutions may require more sophisticated governance, data, scenario analysis and risk management capabilities, while smaller institutions may adopt simpler approaches.
Regardless of size, all institutions should be able to demonstrate that their transition planning arrangements are appropriate, effective and integrated into business decision-making.
Where Financial Institutions May Face the Greatest Challenges
Many of the capabilities required under the TPG already exist in some form within most financial institutions. The challenge lies in enhancing, connecting, and operationalising these capabilities in a way that supports effective transition planning. Implementation challenges are likely to arise in these three areas:
Data Availability | Effective transition planning depends on reliable and decision-useful data. However, obtaining transition-related information from borrowers, policyholders and investee companies remains challenging, particularly for SMEs and privately held entities. Where data gaps exist, institutions will need robust governance over the use of proxy data, including clear methodologies, assumptions and documentation. |
Translating Analysis into Action | Many financial institutions have already conducted climate scenario analysis exercises. The challenge under the TPG is demonstrating how the results influence real business decisions. MAS expects scenario analysis to support portfolio management, underwriting, lending, investment and capital planning decisions, rather than being treated as a standalone compliance exercise. |
Building Organisation-Wide Ownership | Transition planning increasingly requires collaboration across risk, business, investment and customer-facing functions. Institutions will need to equip relationship managers, underwriters and investment professionals with the knowledge and tools required to engage counterparties effectively and incorporate transition considerations into business decisions. |
Five Actions Financial Institutions Should Take Now
With less than a year remaining before the implementation deadline, institutions should begin preparing now by focusing on the following priority actions.
Conduct a Gap Assessment | Evaluate existing environmental risk management practices against the TPG and identify areas requiring enhancement. For most organisations, the challenge will be strengthening and operationalising existing frameworks rather than building from scratch. |
Strengthen Governance and Accountability | Review board and management oversight arrangements, establish clear ownership of transition-related risks and ensure climate considerations are incorporated into strategic and risk appetite discussions. |
Enhance Scenario Analysis Capabilities | Assess whether existing climate scenario analysis and stress testing exercises are sufficiently robust, and ensure outputs can be used to support business and risk management decisions. |
Develop Robust | Identify key data gaps, assess available data sources and establish governance over the use of proxy data. Strong documentation and controls will be essential to demonstrate reliability and consistency. |
Build Internal Capabilities | Equip relationship managers, underwriters, investment professionals and risk teams with the skills needed to assess transition risks and engage counterparties effectively. Clear engagement frameworks and practical training programmes will be critical to successful implementation. |
Looking Ahead
Financial institutions that begin preparing early will be better positioned not only to meet MAS supervisory expectations, but also to embed transition planning as a core strategic capability.
Given the practical challenges mentioned above, institutions should take a structured and iterative approach starting with gap assessments and progressively building governance, processes, and capabilities.
Baker Tilly supports clients across the full transition planning journey, from diagnostic assessments and governance design to data strategy development, scenario analysis, and implementation, helping institutions translate regulatory expectations into actionable and sustainable outcomes.
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