The Singapore Exchange (SGX) released a consultation paper, ‘Sustainability Reporting: Comply or Explain’ on 5 Jan 2016. In the consultation paper, SGX provides a background and reasons for sustainability reporting, before putting forward amendments to both mainboard and catalist rules, and reporting guidelines. The proposed amendments and the guidelines will be open for public comment until 5 Feb 2016.
The primary components proposed to be included in sustainability reports are:
- Environmental, social and governance (ESG) factors material to the company,
- Policies, practices and performance of the company in relation to each material ESG factors,
- Targets for the forthcoming year,
- The Sustainability Reporting Framework used, and
- A Board Statement confirming compliance with SGX’s guidelines or explaining incompliance
The guidelines also provide some flexibility to companies. A phased approach for implementation of sustainability reporting is recommended, such that newly reporting companies are given time to ensure that their sustainability disclosures have quality and depth. Companies are also not expected to provide independent assurance of their reports in the early stages.
SGX is also seeking feedback for the inclusion of Anti-corruption and Diversity as part of the primary components. Other features awaiting comment include matters relating to stakeholder engagement, materiality, responsibilities of the board, and frequency of reporting. For the latter, SGX proposes that reports be published annually, within 5 months after the end of each financial year. All listed companies will begin sustainability reporting for any financial year ending on or after 31 December 2017.
In line with SGX’s Guidelines, Paia is rolling out a Toolkit to simplify the reporting process specifically for SMEs. This Toolkit provides SMEs with the necessary tools to produce a sustainability report in line with SGX’s requirements. Read more about it here.
More information about the consultation paper:
- Business Times, “Designing a sustainability reporting regime”, 6 Jan 2016
- Business Times,“SGX offers flexibility in proposed sustainability reporting rules”, 6 Jan 2016
- The Straits Times, “SGX to seek feedback for sustainability report guidelines”, 5 Jan 2016
- Channel News Asia, “SGX seeks public feedback on proposed rules for sustainability reporting”, 5 Jan 2016