Singapore Exchange Regulation to Revise Listing Rules with Mandatory Climate Disclosures

Singapore Exchange Regulation (SGX RegCo) on August 26 proposed revisions of the listing rules to demand sustainability-related reporting from listed companies, according to The Business Times on the same day. The bourse would require listed firms to disclose their ESG efforts, climate-related information, and details on board diversity policy. Notably, the mandatory climate disclosure requirements were based on the recommendations of TCFD. Furthermore, sustainability reports would also need assurance in the future and all board members should attend sustainable training. The revision proposal is still under discussion and seeking public opinions, expected to be launched next January.

Previously, this January, SGX launched the world’s first ESG real estate investment trusts (REIT) derivatives, namely the SGX Nikkei ESG-REIT. The REIT consists of 60 Tokyo-listed stocks, targeting to add some ESG-related stocks into investment portfolios. Moreover, SGX was also the first Asian exchange to commit to a carbon reduction target. According to the announcement, SGX set the 2031 goal of reducing 42% carbon emissions based on the level of the 2021 fiscal year, ranging from July 2020 to June 2021, and promised to keep global warming to 1.5°C above pre-industrial levels by using proper emission methods.

Other Asian stock exchanges also release or improve their ESG reporting rules and investing projects. In July 2020, HKEX’s [0388:HK] revised ESG Reporting Guide took into force, adding several mandatory reporting rules, such as major climate changes. Later, last December, HKEX launched its Sustainable and Green Exchange called STAGE, aiming at Asia’s first sustainable financial product platform with multiple asset classes. On June 4, 2021, Yi Gang, governor of China’s central bank, stated that PBoC was planning to implement mandatory climate-related information disclosures with Chinese major commercial banks as the first batch, then expanding to domestic listed companies. However, different from HKEX, the two stock exchanges in the Chinese Mainland still have not released specific ESG reporting guidance.

Sources:

https://www.businesstimes.com.sg/companies-markets/sgx-regco-seeks-feedback-on-climate-reporting-esg-board-diversity-proposals

https://www.sgx.com/media-centre/20210614-sgx-launches-worlds-first-esg-reit-derivatives

https://www.sgx.com/media-centre/20210715-sgx-first-asian-exchange-commit-15degc-aligned-science-based-emission

https://www.hkex.com.hk/News/News-Release/2020/201201news?sc_lang=zh-HK

http://finance.sina.cn/zl/2019-12-23/zl-iihnzahi9422685.d.html

https://www.senecaesg.com/blog/pboc-to-introduce-mandatory-disclosure-of-climate-related-information/