1. Good morning everyone. I am heartened to see so many of you at this sharing session. Last month, SGX RegCo launched a public consultation on the proposed mandating of climate reporting and introduction of board diversity disclosures. On the proposed consultation, I like to bring to your attention three points .
2. First, Climate Change is a global challenge and interest in climate change is increasing across the world. In Singapore, we are also taking firm action to do our part to build a sustainable future. Singapore too regards the issue of climate change seriously. Our Prime Minister has called it “a matter of life and death” and that “everything else must bend at the knee to safeguard the existence of our island nation”. We are a little red dot on the world map, located in a low-lying city island, at risk from rising sea levels and the effect of extreme weather patterns such as unusually heavy rainfall.
3. Second, you may wonder how listed issuers are linked to climate change. The link may not seem obvious to some or secondary to others. That is until you consider that investors and other major providers of funding and other key services are taking climate change seriously. They have consequently become more discerning, more demanding about how their investee companies and clients are responding to environmental issues. They worry about reputational and operational risks arising from the E of ESG. To keep your lenders, insurers and investors happy, you as businesses will have to be serious about managing your environmental risks.
4. How do you demonstrate this? I can think of no better way to do so than to have a published report based on certain prescribed standards and better still, some form of assurance.
5. To address this need, we are proposing to mandate climate disclosures in sustainability reports in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). These are internationally recognised recommendations so you can be sure that your stakeholders will find disclosures based on them acceptable.
6. But what are these TCFD recommendations about? SGX RegCo is acutely aware of the knowledge gap as far as the recommendations are concerned. This is why we together with SGX’s new Sustainability and Sustainable Finance unit headed by Ms Herry Cho will be rolling out various capacity building programmes focused on TCFD reporting and in particular, on carbon emissions.
7. The third point I would like to touch on is our proposals on board diversity disclosures. Board diversity is not new and has been a topic of discussion in recent years. Professional bodies including the Singapore Institute of Directors have been advocates of this and monitoring this closely. The contribution of a diverse board to corporate value creation is well-recognised. Diversity is a principle of the Code of Corporate Governance that issuers adhere to on a ‘comply or explain’ basis under the Listing Rules. Speaking on a personal basis, as a woman myself , the topic of diversity has always been close to my heart. Gender diversity is after all, a visible form of diversity widely tracked by investors and other stakeholders globally.
8. Given the increasing emphasis on board diversity, we think this is a good time for Singapore to advance on this front in terms of standards on diversity disclosures. We are proposing to do so by moving from voluntary basis to mandatory compliance.
9. My colleague, Michael will be providing more details on our proposals later. The consultation is open till 27 September, and I would appreciate and encourage you to provide your feedback on the framework.
10. If the framework and subsequent actions are done right, you will be among leading companies in the region and the world, producing internationally recognised reports and data that capture clearly how you are managing ESG risks, in particular climate risks., as well as ensuring your board has the diversity necessary for the sustainability of your business.
11. On this note, I wish everyone a great day ahead. Stay safe and thank you very much for your attention.
