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Nexia Pulse

Sustainability Reporting: A New Requirement for Listed Companies

This article is authored by Chin Chee Choon, Director, Nexia TS

As defined by the Brundtland Report of 1987, sustainability is meeting the needs of the present generation without compromising the ability of future generations to meet their needs. As responsible business owners and companies, we have to look beyond financial assessment when running businesses. Reports have also shown that companies which disclose their sustainability reports, increase the investor’s confidence and values of the companies.

Principal benefits of sustainability reporting

Besides being an important aspect of holistic disclosure by listed companies, the core benefits of sustainability reporting are good corporate governance and improved stakeholder communications. When done right, it is a powerful tool for companies to describe how they create long term value by progressively managing its Environment, Social and Governance (ESG) risks and leveraging on related opportunities that may be presented to the organisation.

Good corporate governance

Stakeholder interests often take centre stage in the arena of corporate governance. Therefore, by encompassing the objectives of accountability and corporate performance, the practice of systematic sustainability reporting will give stakeholders a well-rounded report on a listed company by tracking and disclosing issues relevant to the environment and social performance, amongst many other important reporting considerations.

Improved stakeholder communications

By expanding disclosure beyond merely financial disclosure to include ESG factors, sustainability reporting will help to improve stakeholder communications in its objectives to provide a broad-based, non-financial perspective on the organisation.

Sustainability reporting guidelines by SGX

The Singapore Stock Exchange (SGX) has issued a “Guide to Sustainability Reporting for Listed Companies” in 2011 and subsequently on 5 January 2016, a consultation paper was issued on “Sustainability Report: Comply or Explain”, where primary listed issuers on both SGX Mainboard and Catalist need to issue their sustainability report on a comply or explain basis from financial year ending on or after 31 December 2017. The affected issuers must issue their Sustainability Report on an annual basis within 5 months of the end of their financial year.

5 Primary Components

 

SGX has proposed 5 Primary Components to be included in the Sustainability Report:

SGX has further suggested the phased implementation approach

How Can Nexia TS Help You

  • Facilitate workshops for issuers/companies/business owners to better understand the Sustainability Reporting project

  • Evaluate suitability of issuers’ identified international Sustainability Report framework and ESG factors (quantitative and qualitative)

  • Review the management’s draft Sustainability Report based on the international framework identified and the recommended approach guidelines by SGX
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    CONTACTS
    For a more in-depth discussion on how sustainability reporting can help your business to create long term value, please contact:

    Mr Chin Chee Choon
    Director
    ccchin@nexiats.com.sg

    Mr Gary Ng
    Director
    garyng@nexiats.com.sg