Key highlights and next steps
The Singapore Exchange (SGX) has announced its guidelines for sustainability reporting. The guidelines will apply to listed companies on a 'comply or explain' basis from the financial year ending on, or after 31 Dec 2017, with reports to be published from 2018.
In January 2016, SGX commenced its consultation process on the Sustainability Reporting Requirements. Following the consultation process, the following key changes were made:
- Companies are now given up to 12 months from the end of the financial year to publish their first report. This is effective for any financial year ending on or after 31 December 2017. Thereafter, issuers will need to file reports within 5 months after their financial year end.
- The materiality principle will be applied when determining whether an Environmental, Social or Governance ("ESG") factor should be reported on. Factors like corruption and diversity can be excluded, if assessed to be immaterial by companies, but it is advised that relevant information be presented on their website should there be sufficient interest.
- Instead of a compliance statement from the Board, the Board statement to be included in the reports must describes the company's sustainability efforts.
The guidelines require that report should describe sustainability practices with reference to 5 primary components which include:
- A reporting framework
- Materiality assessment
- Policy, practice and performance reporting
- Target setting
- Statement by the board
We highlight a summary of key points on the recent Sustainability Reporting guidelines.