Singapore is facing significant economic risks due to climate change. According to Indranee Rajah, Second Minister for Finance, these risks go beyond immediate financial losses from extreme weather. They also include disruptions to supply chains that can adversely affect the country.
At the recent Sustainability Summit 2026, Rajah highlighted that understanding these risks brings new opportunities. Legal firms, accountants, and consultants are stepping up to help navigate sustainability regulations and advise on green financing. This shift is creating demand for specialized expertise, presenting growth prospects in the fields of sustainable development and climate risk assessment.
With Singapore relying heavily on imports for food, the nation is particularly vulnerable to external shocks caused by climate change. In 2025 alone, extreme weather events in the Asia-Pacific caused over $70 billion in losses. Such events can damage critical infrastructure and disrupt port operations, jeopardizing food security and overall economic stability.
The future looks challenging. By the end of the century, sea levels around Singapore could rise significantly, and daily temperatures may increase by over 5 degrees Celsius. In response, financial institutions are starting to recognize the impact of climate change on their bottom lines. For instance, Singaporean banks DBS, OCBC, and UOB conducted a groundbreaking study on how the loss of natural ecosystems could affect the food and agriculture sector, which contributes 11% to the region’s GDP.
The results indicated that upstream players in industries, like palm oil, are particularly sensitive to nature-related risks, making it essential for companies to adapt and evolve. The palm oil sector, valued at around $60 billion, is largely dominated by South East Asian nations like Indonesia and Malaysia, which produce over 85% of the world’s supply.
Recognizing these threats, Singapore has pledged to make 2026 the “Year of Climate Adaptation.” This initiative aims to prepare for the impacts of climate change through various projects focused on heat resilience, flood protection, and promoting local produce.
To bolster sustainability in the legal sector, the Ministry of Law recently launched the Environmental, Social, and Governance (ESG) Legal Secondment Programme. This program allows lawyers to gain hands-on experience in ESG projects, enhancing their expertise in sustainable finance. Coupled with the Sustainable Finance Jobs Transformation Map, this initiative identifies skills required by the financial services sector to meet sustainable financing demands.
The Monetary Authority of Singapore has committed $35 million to improve skills in sustainable finance, including accredited courses. Educational institutions also play a crucial role, with programs aimed at equipping professionals with necessary skills for climate and sustainability reporting.
Dr. Bambang Brodjonegoro from the Asian Development Bank Institute noted that climate change is severely impacting water systems in Asia. In Indonesia, flooding has resulted in massive economic losses, prompting discussions about building protective structures similar to Singapore’s Marina Barrage.
The summit organized by the NUS Sustainable and Green Finance Institute attracted around 220 participants, including academics and policymakers, to discuss these pressing issues. As climate change continues to pose risks to economies worldwide, addressing these challenges will require collaboration across multiple sectors and innovative solutions.
For more on how climate change affects economies and potential solutions, check the World Bank Report for detailed insights.
