What of Sustainability Reporting Regimes?

The Green Swan Initiative’s Response to the Singapore Exchange Regulation Consultation Papers on Climate and Diversity.

While corporate sustainability reporting has gained traction in recent years as one of the key puzzle pieces to solving the climate crisis, the roots of sustainability reporting in fact date back to the corporate environmental reporting movement of the 20th century. Since then, the corporate practice of making non-financial disclosures has shifted in purpose: what was once intended as a public relations tool and means through which to control a company’s public image has now evolved into one of the many mechanisms deployed for ensuring that companies remain accountable for their environmental, social and other non-financial impacts.

For this reason, whereas companies previously had free rein to determine what information and data would be included in their sustainability reports, there has been a marked regulatory shift towards favouring mandatory disclosure regimes. In this respect, regulatory bodies play an increasingly active role in shaping the practice of sustainability reporting through continued refinement of their regulatory regimes. Nevertheless, companies still retain much discretion over their choice of standard-setting body and, to a large extent, what information will be available to the public.

In August 2021, the Singapore Exchange Regulation (“SGX”) published two consultation papers seeking views from the public on its proposed plans to strengthen its sustainability reporting regime and enhance board diversity of its issuers. In the consultation papers, SGX expressly recognised that securities exchanges can enhance transparency and accountability on sustainability issues, facilitate the integration by market participants of sustainability issues into the pricing and allocation of capital and thereby contribute towards long-term resilient and sustainable investment. GSI has responded to select questions from the two consultation papers which are relevant to the topic of SGX’s sustainability reporting regime. You can access our response here: download PDF.