Meeting the new guidelines for Sustainability Reporting

From the end of 2016, new annual Sustainability Reporting rules came into effect for SGX listed companies. 

By Chin Chee Choon

 

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.

 

 

SGX has further suggested the phased implementation approach:

 

 


 

ABOUT THE AUTHOR

 

Chee Choon has more than 16 years of collective experience in Risk Advisory, Internal Audit, External Audit and Sarbanes-Oxley areas with PricewaterhouseCoopers, Deloitte and Touche and two US Multinational Corporations (MNC) prior to joining Nexia TS.

 

Chee Choon heads Corporate Governance, Risk Advisory and Internal Audit services for NexiaTS and has been involved in the internal audit reviews of companies listed on the Singapore Stock Exchange, Government Agencies and also non-profit organisation. Other than internal audit, he was also involved in special projects such as Enterprise Risk Management, pre-IPO internal control reviews, fraud investigation and review of internal control manuals. Chee Choon is also the engagement director for the audit of companies from various industry and sizes including companies listed on the Singapore Stock Exchange. He was involved in IPO projects where the firm functions as reporting accountants. For more information visit www.nexiats.com.sg

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