SINGAPORE: The Singapore Exchange introduced sustainability reporting on a "comply or explain" basis on Monday (Jun 20).
Singapore-listed companies will have to publish a sustainability report at least once a year, no later than five months after the end of each financial year, covering five primary components: material ESG factors; policies, practices and performance; targets; sustainability reporting framework; and their Board statement.
The new requirements take effect for any financial year ending on or after Dec 31, 2017. For the first year, firms will be given up to 12 months from the end of the financial year to publish their report.
If a company excludes a primary component, it must describe what it does instead, and its reasons for doing so.
To help firms cope with new requirements, SGX will organise training workshops by
sustainability reporting consultants. The bourse is also planning other initiatives, including an online portal.
SGX CEO Loh Boon Chye said: “SGX supports our 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 (ESG) efforts.”
FOCUS ON PREPARING SUSTAINABILITY REPORT: SMCCA
In a statement to the media on Monday, the Small and Middle Capitalisation Companies Association (SMCCA) said it "welcomes SGX's Sustainability Reporting Guide". It also noted that SGX has "softened many requirements ... in view of reducing anxiety to small- and middle-capitalisation companies when implementing this report".
The association urged companies not to worry about how to satisfy the new requirements, but to focus on "how to differentiate themselves in the eyes of stakeholders through making this report unique and useful".
"SMCCA highlights that the five components in the guide are not overwhelming to implement and provide sufficient flexibility to allow companies to customise and differentiate themselves if they put sufficient effort into working on this initiative," the association said.
"SMCCA also noted SGX has also given companies 12 months from their financial year end to publish their sustainability report in their first year of reporting. This is more than the seven months suggested by SMCCA in its feedback."
The association added that it has identified a consultant who has completed sustainability reports for Singapore-listed companies to provide such services.
"SMCCA will work with these consultants to monitor progress of preparing the report and provide feedback to SGX on difficulties and challenges periodically. SMCCA is also working on identifying more parties and consultants to work with to help companies on implementing the report," it said.