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SGX introduces sustainability reporting on “comply or explain” basis

by June 20, 2016 General

SINGAPORE, June 20 (Xinhua) — Singapore Exchange (SGX) on Monday announced that the bourse will introduce sustainability reporting on a “comply or explain” basis, which requires Singapore-listed companies to publish a sustainability report at least once a year, no later than five months after the end of each financial year.

The sustainability reporting should describe practices with reference to five primary components, namely material environmental, social and governance (ESG) factors; policies, practices and performance; targets; sustainability reporting framework; and the Board statement.

The bourse said that if a company excludes a primary component, it must describe what it does instead, and its reasons for doing so.

The new requirements will take effect for any financial year ending on or after Dec. 31, 2017. Firms will be given up to 12 months from the end of the financial year to publish their first report, SGX added.

To help firms cope with new requirements, SGX will organize training workshops by sustainability reporting consultants. The bourse is also planning other initiatives including an online portal.

CEO of SGX Loh Boon Chye said SGX supports listed companies’ efforts to meet the growing interest in sustainability from shareholders and potential investors worldwide.

“The annual reporting of non-financial information will enhance the visibility of SGX-listed companies among investors who seek sustainable investment and want to review a company’s environmental, social and governance efforts,” said Loh.

SGX consulted on the sustainability reporting requirement at the start of 2016 and received strong support for the “comply or explain” framework. After carefully considering the feedback received, some changes to the Sustainability Reporting Guide and the requirement were made.