SGX urges feedback on proposed sustainability reporting rules

They’ll be implemented on a “comply or explain” basis.

The Singapore Exchange (SGX) is seeking public feedback on proposed guidelines for sustainability reporting which will be introduced on a “comply or explain” basis. According to a media release by the market regulator, the approach will give companies enough legroom to report in the way that best suits their industry and circumstances.

SGX asserts that sustainability reporting will complement financial reporting with the environmental, social, and governance (ESG) aspects of businesses, thereby giving investors better insight into the companies they invest in.

The bourse stated that the introduction of sustainability reporting is in response to rising global interest in sustainability information—in June 2015, SGX’s survey of institutional investors found that over 9 in 10 respondents consider ESG factors when investing.

SGX said that it expects the new rules and guide to apply to firms from the financial year ending on, or after 31 December 2017, with reports published from 2018.

Issuers will have to include five primary components in a sustainability report: an explanation of policies, practices, and performance; a discussion of ESG factors; targets for the forthcoming year; the sustainability reporting framework the company is following; and a board statement confirming compliance.

The consultation for the proposed guidelines is open until 5 February 2016.