SGX-listed firms expected to publish sustainability report from FY2017

This will help meet growing demand from investors for more information on sustainable aspects of businesses, says Singapore Exchange.
Nicole Tan Channel NewsAsia 7 Oct 15;

SINGAPORE: Companies listed on Singapore Exchange (SGX) will be expected to publish sustainability reports on a comply-or-explain basis starting from Financial Year 2017. SGX said this will help meet growing demand from investors for more information on sustainable aspects of businesses.

Ahead of the implementation, SGX has been gathering feedback from investors and companies on how to best execute the new requirements.

Singapore's first naturally-cooled mall, Star Vista, is among a rising number of green buildings in the city-state. Amid a growing desire for sustainable business practices, SGX is challenging firms to articulate and disclose what they have done in this area.

SGX special advisor Yeo Lian Sim, said: “As an exchange, we do not tell companies how they run their businesses, but we do tell companies that they should produce reports and make disclosures in a timely manner to investors who have invested in their equity.

“The reporting is of what the company already does. So we have seen for instance from our focus groups, that companies - large and small - already manage their risks, and they try and realise opportunities. So, what they have not yet done is to articulate these risks in terms of environmental and social and governance metrics."

In 2011, SGX released a set of guidelines for sustainability reporting for listed firms. Currently, the move is voluntary - but already, 160 out of 537 of mainboard-listed companies published these reports in 2013.

Ms Yeo added: "Investors clearly want it, they are in favour of the increased understanding it gives them. For the company, making these sustainability reports will be some increased effort for sure, but there are also benefits. These better-informed companies have investors that are likely to be more lasting, and that definitely should translate into value for the company."

Industry watchers have said it is a step in the right direction in encouraging sustainable business practices.

EY Climate Change and Sustainability Services partner K Sadashiv, said: "Those who are already doing, or taking steps that are of a sustainable nature that have not been reporting, will begin to showcase what exactly they are doing to make it clearer.

“And those who have not embarked on doing anything at all, would because of this start thinking of doing something. So, you will find a mixed bag of companies, those who have already done something will start talking about it. Those who have not yet done anything, will start doing it, which will lead to reporting. Unless they have carried out some activities, they will have nothing to report on."

Separately, the Association of Banks in Singapore is set to announce new guidelines on responsible financing later this week.

- CNA/xk