A joint review of Singapore-listed issuers’ sustainability reports by Singapore Exchange Regulation (SGX RegCo) and the Centre for Governance and Sustainability (CGS) at the National University of Singapore (NUS) Business School has revealed that listed issuers have shown overall improvement in their sustainability reporting and the level of disclosure as compared to the last review in 2019.
The review found that the average overall score based on the SGX-CGS Sustainability Reporting Scorecard rose to 71.7 points from 60.6 in 2019.
The improved score comes amidst the COVID-19 pandemic, heightened concerns about the impact of climate change and a boom in sustainability-linked financing.
The review indicates an overall increase in the depth and understanding of sustainability reporting, as well as sustainability management among Singapore-listed issuers.
Smaller issuers, especially those listed on the sponsor-supervised Catalist board, made the biggest gains. The average scores of smaller issuers had increased by 13 points, followed by mid-cap issuers by 10 points and big-cap issuers by 6 points.
Disclosures reflected better, but still limited depth of reporting. Among all companies, 66% disclosed unfavourable aspects of sustainability performance from 55% in 2019. In disclosing both positive and negative performance trends, 50% did so, compared to just 26% in 2019.
Issuers are observed to be embedding sustainability more deeply into their corporate structures and strategies. The proportion of issuers that linked top executive remuneration and employee, environment, social and governance (EESG) performance was a modest 26%, increasing from 8% in 2019.
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The study had also explored the impact of Covid-19 and climate change in closer detail. About 61% of issuers had made disclosures related to the pandemic, predominantly covering efforts to ensure the safety and well-being of employees and other stakeholders given the declines in sales as well as operational disruptions.
With regards to climate change disclosures, almost half of listed issuers had discussed climate change as an EESG factor in their reports, including economic impacts and emissions.
Associate Professor Lawrence Loh, director of CGS at NUS Business School cites the benefits of good sustainability reporting where it may “help companies attract environmentally, conscious customers, obtain lower-cost financing and gain better capital”.
Overall, Singapore-listed issuers must continue developing their sustainability reporting in order to better manage emerging risks and opportunities, and to be better prepared for greater scrutiny from stakeholders.