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How can investors make sense of sustainability reports?

Jovi Ho
Jovi Ho7/20/2022 06:34 PM GMT+08  • 9 min read
How can investors make sense of sustainability reports?
Bourses, governments and boards are attempting to measure the immeasurable. How, then, can investors make sense of this new data?
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Investors who may be used to only looking at financial reports will have another document to parse through next year. The Singapore Exchange (SGX) has mandated climate reporting for all listed companies in the current financial year.

All companies must provide these disclosures on a comply-or-explain basis in their sustainability reports for financial years starting on or after Jan 1.

The disclosures will then become mandatory from FY2023 for companies in the financial, agriculture, food and forest products and energy industries.

If your assets are not green, if your assets are going to be outdated, it will definitely be a lot more difficult to rent out.

Valuation is not a science, which means you can’t take a mechanical approach to the 20,000 companies listed across different exchanges. It really has to be company-specific.

When you look at companies that have good ESG ratings, they tend to outperform the market. But it’s not causality; it’s a correlation.

It’s not about throwing a couple of solar panels or doing your best corporate social responsibility event.

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