Daily CSR
Daily CSR

Daily CSR

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Sustainability Indices Have Been Introduced At Singapore Stock Exchange



06/30/2016

In order to help the investors and the companies alike to promote “corporate transparency”, SGX introduces new measures.


Dailycsr.com – 27 June 2016 – There is an increasing demand from the investors for accessing “information on ESG factors”, for evaluating “listed companies”. Prominent stock exchange markets around the world are giving importance to “corporate disclosure on sustainability performance” for creating a “stable financial system” to promote “consistent economic growth”.
 
Vikas Vij writes that stock exchange can play the role of a “critical lever” which can enforce teamwork between companies, regulators and investor for improving “corporate transparency and performance on ESG issues”. In order to pursue the same goal, the “World Federation of Exchanges” has chalked out certain guidelines related to ESG metrics which the companies need to disclose to their investors.
 
Moreover, Vij reports that:
“Companies listed on the Federation’s 64 global exchanges were urged to report on 30+ metrics to help investors in their decision making. A key driver behind this move was the growing demand of large investors to have more comparable disclosures on sustainability to arrive at more accurate market valuations.”
 
Taking the first steps, SGX has announced the “SGX Sustainability Indices” launch, whereby Sustainalytics, a partner of SGX, has contributed the “ESG research and ratings for SGX-listed companies”. The “Sustainability Indices” incorporates “four new indices” for the “SGX-listed companies”, which maintain a clear lead in abiding the “ESG standards” in comparison to other peers.
 
Vikas Vij also informs that the Chief Executive Officer at SGX, Loh Boon Chye thinks that “investors across the world are placing increasing importance on ESG, resulting in significant growth of AUM (assets under management) allocated to ESG strategies and growing demand for transparent benchmarking tools”.
 
The Sustainability Indices of SGX will provide a transparent format for the investors to receive the needed information about the “sustainability practices of SGX-listed companies”. In this manner, they can identify, the “ESG leaders” of Singapore. Amid the increasing awareness of ESG in the international investors circle, the Sustainability Indices will assert the profile of “SGX-listed companies”.
 
The Aberdeen Asset Management’s head of “Corporate Governance”, David Smith, commented on the SGX Sustainability Indices launch:
“...the company fully supports the integration of ESG into the investment process. As a long-term investor, Aberdeen firmly believes in the need to consider and fully understand all risks, rather than narrowly defined financial risks, that relate to a company’s long-term success”, reports Vikas Vij.