Out-Law / Your Daily Need-To-Know

The Singapore Exchange will ask all companies listed on its exchange to disclose climate-related information or explain why they cannot do so.

According to a statement of Singapore Exchange Regulation (SGX RegCo), there are three stages of mandatory climate reporting and all companies from 2022 will need to adopt climate reporting “on a comply or explain basis”. The requirements will become mandatory in 2023 for companies in finance and transportation, with more sectors following in 2024.

The measure was recommended by the Taskforce on Climate-related Financial Disclosures (TCFD).

Listed companies will also be asked to set and disclose targets, plans, and timeline for “achieving the stipulated diversity on its board” from January 2022.

A public consultation on the measures is open until 27 September.

Lisa Hui of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, the law firm behind Out-Law, said: “There has been a notable shift by financial decision-makers to place sustainability at the centre of investment approaches which has wide reverberations for companies globally. The proposed measures represent regulators and governments expanding their focus on incorporating sustainability into investment information and decision making.”

In December 2020, financial institutions in Hong Kong including banks, asset managers, insurance companies and pension trustees started to be requested to disclose climate-related information.

The TCFD is a body created by the Financial Stability Board to publish principles to inform investors of climate-related financial risk and consists of 32 members from across the G20.