The Exchange is seeking feedback from the public and market players on the policy statement.
The policy statement says the sustainability reporting guidelines are voluntary at the moment. But there is a hint that the reporting may become mandatory in future. The policy statement says: "SGX is of the view that as more companies become inspired to adopt sustainability reporting, it will be natural to take the next step on guidelines and standards leading to rules."
These are the key points of the SGX policy statement and the reporting guidelines:
- The Board is responsible for matters of sustainability as it leads and directs the company.
- Environmental, social and governance considerations are important for the long term performance of the company.
- No single standard is advocated, but the Global Reporting Initiative’s Sustainability Reporting Guidelines which are linked to the UN Compact principles, are among the globally recognised standards.
- Applying global standards is important for cross-jurisdictional comparability and to give confidence that SGX-listed companies aim to achieve global best practices.
- The reporting guide says that sustainability reporting is particularly relevant for companies that operate in industries that are susceptible to environmental risks e.g. oil & gas, mining & metals, raw material processing; industries that produce significant environmental pollutants such as chemical and apparel industries; heavy users of natural resources such as palm oil producers, forestry companies, etc.; or part of a supply chain where end customers demand that suppliers behave responsibly.
- The guideline also emphasises the importance of independent assurance of the report from credible assurance firms.
The SGX policy for encouraging sustainability reporting is likely to result in more Singapore-listed companies reporting on their social and environmental impacts. Currently, Singapore companies lag behind in sustainability performance and disclosure from their peers in other developed countries.
The last date for the submission of feedback is on the 29th Oct 2010.
The full policy statement and the guide are available here.