guide+to+sustainability+reporting+for+listed+companies

8/6/2019 Guide+to+Sustainability+Reporting+for+Listed+Companies

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Contents

Page

1. Purpose of the Guide 3

2. Why should listed companies report ? 4

3. Who should report? 5

4. How should listed companies report? 6

5. What should listed companies report? 7

6. When should listed companies report? 8

7. Where should listed companies report? 9



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Purpose of this Guide

1.1 This Guide provides answers to frequently asked questions from listed companies

on sustainability reporting as a supplement to the “Policy Statement on

Sustainability Reporting” issued by SGX on 28 August 2010.

Voluntary Sustainability Reporting by Listed Companies

1.2 Sustainability reporting is not a mandatory requirement for listed companies under

the Listing Manual. It is still a voluntary exercise in Singapore, as in many

countries. However, there is growing interest in sustainability issues globally, and

consequently, pressure to move towards mandatory reporting through regulations

and rules.

1.3 Some listed companies lead sustainability reporting with high standards. However,

most listed companies have yet to embark on sustainability reporting, perhaps due

to constraints such as costs, reporting scope and continuity. This Guide helps

listed companies take that important first step into, what seems, a complexity of

environmental and social performance reporting.



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Why Report?

2.1 The principal benefits of sustainability reporting are good corporate governance

and improved stakeholder communications.

Good corporate governance

2.2 Corporate governance centres on stakeholder interests, and by encompassing the

objectives of corporate performance and accountability, includes the practice of

systematic sustainability reporting.

2.3 An issuer may, for example, track and disclose issues relevant to the environmental

and social performance. This allows an all-rounded and systematic approach in

measuring and assessing the issuer’s performance on the parameters set by the

issuer, and engenders good corporate governance.

Improved Stakeholder Communication

2.4 The disparate nature and interests of stakeholders such as shareholders,

employees, customers, suppliers and communities, compel sustainability reporting

in order to provide a further dimension beyond financial performance. By

broadening disclosure beyond financial disclosure to include, for example, labour

practices, environmental impact and risks, and wider social concerns such ashuman rights, stakeholders realize that issuers are not just money-making

machines. Thus, communication between the issuer and stakeholders may be

improved.



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Who should report?

3.1 The Exchange strongly encourages all issuers without exception to consider

sustainability reporting as an integral part of good corporate governance.

3.2 Sustainability reporting is particularly relevant for issuers who:-

(i) Operate in industries that are susceptible to environmental risks e.g. oil &

gas, mining & metals, raw material processing;(ii) Operate in industries that produce significant environmental pollutants such

as chemical and apparel industries;

(iii) Heavy users of natural resources such as palm oil producers, forestry

companies, etc.; or

(iv) Part of a supply chain where end customers demand that suppliers behave

responsibly.



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How to report?

International accepted reporting frameworks

4.1 The Exchange encourages the adoption of internationally accepted reporting

frameworks, such as the Global Reporting Initiative (GRI) Reporting Framework, in

disclosing the issuer’s sustainability performance. The GRI Reporting Framework is

universally applicable to all organisations and sets out general principles and

indicators that issuers can use to measure and report their economic, environment

and social performance.

Industry-specific reporting frameworks

4.2 Some issuers operate in industries that are extremely sensitive to environmental

and social issues. Industries such as the oil and gas, mining and metal sectors

have high environmental exposures and impacts that warrant specialized reporting

frameworks for meaningful assessment of organisational risks and performance.

These issuers are encouraged to adopt industry-specific reporting frameworks,

such as the framework promulgated by the International Council on Mining &

Metals for the mining and metal industry, or GRI Sector Supplements for selected

industries.

External assurance 4.3 Issuers who have prepared sustainability reports may consider engaging external

assurance providers to conduct independent verification of the reports. Assurance

on a sustainability report increases the credibility of the report by establishing

whether the information is accurate. Assurance also acts as an important feedback

mechanism to issuers in improving the quality of their sustainability reports.



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What to report?

Aspects of sustainability reporting

5.1 In considering reporting of sustainability issues, the Exchange encourages issuers

to consider and provide disclosure on the following matters, where material to their

business operations:-

(i) Relevant laws, regulations, international agreements, or voluntary

agreements with strategic significance to the organisation and its

stakeholders, including fines, sanctions, prosecution, and accidents for non-

compliance with environmental laws and regulation;

(ii) Sustainability policy;

(iii) Risk management policies and processes arising from environmental and

social concerns;

(iv) Main topics of interest and future challenges for the specific industry sector

which the issuer operates in as observed by peers and competitors; and

(v) Assessment of sustainability impacts, risks, or opportunities.

5.2 The above factors are not exhaustive and issuers will have to take into account

unique industry concerns, risks, and company specific characteristics in

determining relevant sustainability disclosure.



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When to report?

Disclosure at initial listing

6.1 In a disclosure-based regime, disclosure of sustainability issues is critical to

potential investors in assessing a prospective issuer’s future performance.

Fundamental license-to-operate questions, which include management of

environmental and social risks, compliance with key environmental and labour

regulations, as well as past infractions, must be disclosed for investors to consider

and arrive at informed investment decisions.

6.2 In reviewing an initial listing application, the Exchange will expect an applicant to

disclose material information relating to sustainability risks affecting the applicant’s

business and operations, including an impact assessment and description of risk

mitigation procedures. This encourages an applicant to consider matters relevant

to an investor’s appraisal of its stance on sustainability issues, given the

increasing importance and coverage.

Disclosure on a continuing listing basis

6.3 Under Rule 703, an issuer is required to disclose information which is necessary to

avoid the establishment of a false market in its securities, or that would be likely to

have a material effect on the price or value of securities of that information.

Disclosure of sustainability issues may fall within the ambit of Rule 703.

6.4 If an issuer assesses that a particular piece of information is currently not material

under Rule 703, but may have wider and long-term implications on organisational

performance, the Exchange encourages the issuer to make disclosure. Should

there be no sustainability impact, a negative statement would be informative.



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Where to report?

7.1 The Exchange does not prescribe the format of how issuers should report on their

sustainability performance.

Annual report disclosure

7.2 The annual report provides investors an annual progress report of the company’s

performance. From the issuer’s perspective, the annual report is a valuable

communications platform that allows the issuer to provide a frank assessment of

how well it has met its organisational objectives for the year under review. As a

medium for assessing annual corporate performance, an issuer may naturally

choose to disclose its sustainability performance as part of its annual report in

communicating with its stakeholders.

Standalone sustainability reports

7.3 There are issuers who have dedicated comprehensive disclosure of environmental

and social issues in standalone sustainability reports. Such issuers are

encouraged to continue with this trend.

guide+to+sustainability+reporting+for+listed+companies

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