In June this year, Singapore Exchange (SGX) introduced a sustainability reporting guide prompting listed firms to disclose non-financial information on a comply-or-explain basis.
Asked how this initiative would affect investor relations, Harold Woo, president of the Singaporean IR body IRPAS, believes the new guidelines will bring the country in line with other markets in the region such as Hong Kong, India, South Korea and Taiwan, which have introduced their own voluntary or mandatory requirements.
He points out that Singaporean companies issuing sustainability reports will be able to access the global group of investors that have signed the UN-backed Principles for Responsible Investment (PRI) – a $60 tn pool of capital. The disclosure of non-financial performance data will demonstrate a company’s commitment to transparency and accountability, also helping investors make a more comprehensive assessment of a firm’s prospects and the quality of its management.
Based on a recent report by consultancy Corporate Citizenship, only 13 percent of the hundred largest SGX-listed companies appear to be fully compliant with the guidelines, with 23 percent disclosing some sustainability related information in their annual reports or through other media, Woo highlights.
He advises small and mid-cap companies with leaner resources to start the reporting process as early as possible, as they may find it more difficult to comply with these new requirements. ‘Engaging an external consultant is an option but the cost may prove a burden for some companies,’ he adds.
Woo also stresses that sustainability reporting is a global trend – and one that is here to stay. Firms that overlook quality sustainability reporting will eventually find themselves in a unfavorable position when it comes to their IR strategy.
‘IRPAS will be conducting workshops with dedicated service providers such as Black Sun, Sustainalytics, Corporate Citizenship and Trucost to guide IROs in the run up to the implementation of the sustainability reporting guide that will apply to all listed companies with a financial year ending on or after December 31, 2017,’ he says.
