All 700+ companies listed on the SGX will soon be required to produce an annual sustainability report, according to the SGX chief executive Magnus Bocker. He made the announcement at last Friday’s International Singapore Compact CSR Summit, letting attendees know that sustainability reporting will no longer be relegated to “nice to have” territory.
“Our market needs to collectively take the next step upward and move to comply or explain on sustainability issues,” Bocker said. The SGX will conduct a year-long consultation with listed companies to help determine the specific guidelines that will be required in the annual sustainability reports. Obligatory reporting is likely to commence in 2017.
Singapore itself has moved to prioritize sustainability issues in recent years, finishing first in Corporate Knights’ 2014 Sustainable Asia Scorecard. CK’s own Ashley Renders profiled the country’s efforts around greater water conservation and pollution control, vital steps for a country with such limited natural resources.
The SGX first began to push for comprehensive sustainability reporting in 2011 when it launched its Sustainability Reporting Guide for listed companies. While the voluntary nature of the standards meant that most companies did not take it seriously, there were several notable exceptions. Three Singaporean companies, City Developments, StarHub and CapitaLand secured spots in the 2014 Global 100 Most Sustainable Corporations in the World list.
In 2013, the SGX released “An Investor's Guide to Reading Sustainability Reports,” to increase investor pressure on listed companies to enhance disclosure and transparency. Even so, the SGX had begun to fall behind its competitors who were disclosing key sustainability metrics. The SGX dropped from 17th in 2012 to 23rd place in 2014 on Corporate Knights Capital’s annual report, “Measuring Sustainability Disclosure: Ranking the World’s Stock Exchange.”
“The SGX is committed to promoting ESG management as part of our overall programs to develop and deepen company valuations of those listed with us,” said Bocker. Mandatory sustainability reporting for all listed companies on the SGX is liable to do just that.
