Singapore to mandate climate and diversity disclosures

The Singapore Exchange (SGX) will start requiring companies to provide climate-related reporting as well as disclosures on board diversity from next year, the bourse said this week.

All issuers must provide climate reporting on a “comply or explain” basis in their sustainability reports from the financial year starting 2022.

Climate reporting will also become mandatory for issuers in the financial, agriculture, food and forest products, as well as energy industries from the financial year 2023.

Those in materials and buildings, and transportation industries will have to comply from 2024.

“Decision-makers want climate information when they allocate assets, extend financing, and price risks. These factors make climate reporting most urgent for industries with the biggest impact,” said Tan Boon Gin, CEO of SGX’s regulatory arm.

From next year, issuers will also be required to set a board diversity policy that addresses aspects such gender, skill and experience.

They must also describe the board diversity policy and details such as diversity targets, plans, timelines and progress in their annual reports.

A separate public consultation on 27 proposed core ESG metrics and a portal for issuers to input relevant data also received strong market support.

Though not mandated, the metrics will be a starting point for what companies can disclose in their sustainability reports.

Respondents noted that an ESG data portal will not only make information more accessible and comparable but will also save costs, make data more transparent, and simplify decision-making for investors.

SGX expects the portal to house information beyond the core ESG metrics.

Information recorded in the portal may include material ESG factors, commentaries and explanations for reported metrics, and discussions on strategies, processes, board statements and targets.

A recent study of 587 Singapore-listed companies commissioned by the Corporate Governance Advisory Committee has shown that 87% of the 3,700 directors in the firms reviewed were male, while 45% had all-male boards.

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