MAS Updates on Good Disclosure Practices for Retail ESG Funds

On 10 June 2026, the Monetary Authority of Singapore (MAS) updated its Information Paper on Good Disclosure Practices for Retail ESG Funds (the Information Paper). The paper was originally issued in December 2024 and has now been revised to reflect findings from thematic inspections carried out in 2025, which included reviews of managers’ public disclosures against their ESG frameworks, practices and controls.

The Information Paper continues to provide examples of good disclosure practices that MAS expects authorised and recognised retail ESG funds to consider when complying with the ESG disclosure requirements set out in MAS Circular CFC 02/2022. While the update does not fundamentally alter the existing disclosure framework, it provides additional guidance in several areas and offers useful insights into MAS' evolving supervisory focus.

Key developments

1. Refinement of guidance on ESG-related terminology

The Information Paper continues to encourage managers to clearly define subjective ESG-related terms used to describe a fund's investment focus and strategy, such as references to "sustainable leaders", "sustainable improvers" or companies with "strong sustainability profiles". While no significant substantive changes have been made in this area, MAS has expanded the accompanying discussion by providing additional explanation as to why clear definitions are important, including the risk of differing interpretations between managers and investors and the role that clear definitions play in facilitating informed investment decisions.

2. Greater emphasis on substantiation and supporting controls

One of the most notable changes is MAS' increased emphasis on ensuring that ESG disclosures are supported by appropriate governance arrangements and operational processes.

The updated Information Paper now expressly states that ESG disclosures should be supported by appropriate policies and processes to ensure the effective implementation of a fund's stated ESG investment focus and strategy and to mitigate greenwashing risks.

This suggests that MAS is increasingly focused not only on the content of disclosures themselves, but also on whether fund managers have the underlying frameworks, controls and procedures necessary to substantiate ESG-related claims made to investors.

3. Additional guidance on ESG methodologies, metrics and data

MAS has expanded its guidance on disclosures relating to ESG criteria and metrics used in a fund's investment strategy.

In particular, the updated paper encourages managers to provide:

• an explanation of how ESG criteria or metrics contribute to the achievement of the fund's ESG investment objectives; and
• disclosure of how frequently the underlying ESG data, criteria and metrics are reviewed or updated.

These additions reflect an increased focus on providing investors with greater transparency regarding the methodologies underpinning ESG claims and the quality and maintenance of ESG-related data used in investment decision-making.

4. New guidance where investments do not meet ESG thresholds

The most significant addition relates to situations where investments may be made notwithstanding the absence of a completed ESG assessment or where investments do not satisfy the fund's minimum ESG rating or scoring criteria.

The updated Information Paper introduces a new section encouraging disclosure of:

• any proxy ESG criteria used where investments are made before a full ESG assessment has been completed;
• the expected timeline for completing post-investment ESG assessments;
• divestment procedures where investments ultimately fail to satisfy the fund's ESG standards; and
• due diligence processes applicable to investments that do not satisfy minimum ESG rating or score requirements.

This additional guidance appears designed to improve transparency around exceptions to a fund's ESG screening framework and the safeguards applied in such circumstances.

5. Expanded expectations for ESG benchmark disclosures

The updated Information Paper also introduces a new discussion on ESG indices used as benchmarks.

Where an ESG fund tracks or references an ESG index, MAS now suggests that managers consider providing additional disclosures regarding matters such as:

• the potential for more frequent changes to ESG index methodologies;
• the methodology used to construct ESG benchmarks;
• the nature and limitations of ESG data used by benchmark providers; and
• the use of proxy data, unaudited information or forward-looking assumptions.

MAS has also expressly referred to the November 2025 IOSCO report on ESG Indices as Benchmarks, indicating that international developments are informing its expectations in this area.

Takeaways and Next Steps for Managers

The June 2026 update does not appear to signal a shift towards significantly more extensive ESG disclosure requirements. Rather, the amendments suggest that MAS is focused on improving the quality, transparency and evidential basis of existing disclosures.

The update illustrates MAS’s increasing scrutiny of whether ESG disclosures are aligned with firms’ actual ESG governance and implementation practices, consistent with its broader focus on governance, operational resilience and investor protection as reflected in recent Information Papers on risk management and valuation practices for fund management companies.

More broadly, these developments appear consistent with MAS' wider ESG and environmental risk management agenda. Similar themes can be seen in MAS' Transition Planning Guidelines for asset managers, which emphasise governance, risk management, stewardship, data quality and ongoing review processes as part of managing climate-related risks.

Practical implications

Managers of retail ESG funds may wish to review their existing ESG-related disclosures in offering documents in light of the updated guidance. This may include revisiting descriptions of ESG methodologies and data usage, the approach to investments that do not meet stated ESG criteria, and benchmark-related disclosures.

Managers are also encouraged to consider the policies, controls and governance arrangements that underpin ESG statements made to investors.

We would be pleased to discuss how these updated expectations apply to your ESG fund structures and disclosure practices, and to assist in reviewing and enhancing the governance, policies, controls and operational processes that support ESG-related statements made to investors.