Climate risks are “increasingly material financially” to Singapore’s economy, Second Minister for Finance and National Development Indranee Rajah warned at a sustainable finance summit hosted by the National University of Singapore.
Economic Exposure
Rajah identified three categories of climate risk facing Singapore: physical risks from sea level rise and extreme weather that threaten coastal infrastructure and property; transition risks as global carbon regulations reshape trade and investment flows; and supply chain risks as climate impacts disrupt key trading partners in Southeast Asia. Singapore imports over 90% of its food, making it highly exposed to climate-driven agricultural disruptions in supplier countries.
Financial Sector Preparedness
The Monetary Authority of Singapore (MAS) has mandated climate stress testing for all major banks and insurers. Results published in early 2026 showed that Singapore’s financial system could absorb climate-related losses under most scenarios, but highlighted concentration risks in Southeast Asian real estate and energy sector lending. MAS has introduced guidelines requiring banks to integrate climate risk into their capital adequacy assessments by 2027.
Green Finance Hub
Singapore is positioning itself as Asia’s leading green finance hub, with sustainable finance assets under management reaching S$450 billion in 2025. The government has issued S$35 billion in green bonds since 2022, funding climate adaptation infrastructure and the green transition. Singapore is also developing a taxonomy for transition finance to guide capital toward hard-to-abate sectors.
Source: Ministry of Finance, Monetary Authority of Singapore
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