Wednesday, 19 June 2024

ABS publishes Singapore guidelines on sustainable private-banking and wealth-management practices

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The Association of Banks in Singapore (ABS) has launched the ABS Sustainable Private Banking and Wealth Management Guidelines (Guidelines), comprising principles for private banks to integrate sustainability considerations with their business models and practices. At the same time, the Private Banking Industry Group (PBIG) Sustainability Taskforce, in consultation with the Institute of Banking and Finance Singapore (IBF) and the Monetary Authority of Singapore (MAS), has developed a common industry training benchmark to upskill private banking relationship managers in the area of sustainability, taking reference from the IBF-MAS developed Sustainable Finance Technical Skills and Competencies (SF TSCs) which are part of the Skills Framework for Financial Services. These efforts demonstrate the private banking industry’s commitment to the transition towards a low-carbon economy. ABS Sustainable Private Banking and Wealth Management Guidelines

The Guidelines, developed with technical input from WWF-Singapore (World Wide Fund for Nature (Singapore) Limited), establish a baseline for sustainability practices to be integrated into private banks’ business models, and will cover private banking activities comprehensively, from wealth planning and investments to financing.

It is envisaged that the Guidelines will promote greater clarity and transparency among private bankers and their clients by framing sustainable investment approaches as:
a. Exclusion – Excluding and avoiding sectors, activities and/or companies from the investment universe based on criteria such as norms and standards, business conduct or values/ethical principles.
b. Integration – Systematically and explicitly including ESG factors in investment analysis and decision making to optimise ESG risk management with return expectations.
c. Thematic – Investing to contribute to environmental or social factor, with fundamental investment objectives considered.
d. Impact – Investing with the intention to generate positive, measurable social and environmental impact alongside a financial return.

Recognising that each bank may be at a different stage of their sustainability journey, private banks should implement these Guidelines in a way that is commensurate with the size and nature of their activities. They may adopt a progressive approach towards implementation, starting with more well-established areas, and then enhancing their processes as generally-accepted methodologies and practices emerge.

Mrs Ong-Ang Ai Boon, Director, ABS, said, “This set of Guidelines will help private banks and their clients in the transition towards a low-carbon economy. The Association will continue to support our members by facilitating capacity building and sharing of best practices in sustainable private banking and wealth management.”

Mr R. Raghunathan, Chief Executive Officer, WWF-Singapore, said, “Singapore is emerging as a regional leader in sustainable finance, and is well placed to help scale global efforts to shift finance to low-carbon and sustainable activities. WWF-Singapore is committed to working with ABS and the private banks by providing expertise to strengthen their sustainability capabilities.” Common Sustainable Finance Training Benchmark for Private Banking Professionals

The PBIG Sustainability Taskforce has studied the 12 SF TSCs and recommends four SF TSCs to be prioritised as critical and core to private banking relationship management job roles.

The four prioritised TSCs are:
• Sustainable Investment Management
• Carbon Markets and Decarbonisation Strategies Management
• Non-Financial Industry Sustainability Developments
• Climate Change Management

These four TSCs have been endorsed by the IBF Private Banking and Family Office Workgroup for inclusion in the skills map for Private Banking and Wealth Management for Relationship Managers (RMs). IBF-accredited courses based on these TSCs will count towards meeting the Client Advisor Competency Standards Continuing Professional Development (CACS CPD) requirements and IBF Certification. Of the four TSCs, Sustainable Investment Management TSC has been identified by the PBIG Sustainability Taskforce as the most essential TSC to strengthen the private banking relationship managers’ ability to advise and help clients implement sustainable investment approaches. Private banks are strongly encouraged to have their relationship managers acquire the skills required under Sustainable Investment Management TSC for CACS CPD and IBF Certification. More details of the four TSCs are available in Annex.

Private banks represented on the PBIG Executive Committee are committed to complete the training and upskilling of their banks’ client-facing employees in the four prioritised TSCs within the next three years or earlier.

The PBIG Sustainability Taskforce has consulted with training providers and Institutes of Higher Learning on customising sustainable finance training programmes for private banking relationship managers. The Center for Sustainable Finance and Private Wealth Singapore, Singapore Management University and the Wealth Management Institute have committed to working with the private banks to develop customised training for the relationship managers and client advisers. Other training providers are also welcomed to develop training programmes based on the prioritised TSCs for IBF accreditation.

Private banks are encouraged to align their training frameworks to cover the four prioritised TSCs, along with the ABS Sustainable Private Banking and Wealth Management Guidelines.

Ms Gillian Tan, Assistant Managing Director (Development and International), MAS and cochair of PBIG said, “We are seeing growing demand for sustainable investments among high net worth individuals and family offices. The launch of a Sustainable Finance training benchmark for private banking professionals will further enhance their ability to advise their clients on sustainable investments and facilitate the channelling of wealth towards purposeful causes. I encourage all private banks to refer to this benchmark as they identify or develop suitable training to deepen their sustainability talent pool.”

Mr Ng Nam Sin, Chief Executive Officer, IBF said, “IBF is heartened that the industry, comprising the PBIG Executive Committee and Sustainability Taskforce have identified, prioritised, and are committed to upskill private banking relationship managers with these must-have competencies. We strongly encourage finance professionals and financial institutions to tap on IBF-accredited courses to upskill and deepen your competencies in Sustainable Finance.”

Mr Benjamin Cavalli, Head of Wealth Management APAC, Credit Suisse and lead for the PBIG Sustainability Taskforce said, “As banks, we play a key role in advancing sustainability through the products, services and advice that we provide to clients and investors. It is therefore imperative that private banking professionals are well equipped with the knowledge and capabilities to support clients better on their sustainable investment journey. I am very honoured to lead the PBIG Sustainability Taskforce in developing the Sustainable Finance training benchmark to guide private banks on upskilling their relationship managers in priority areas and enabling them to lead clients towards a more sustainable future.”

Re-disseminated by The Wealth and Society

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