The Singapore Exchange (SGX) has teamed up with environmental, social and governance (ESG) research provider Sustainalytics for a new suite of sustainability indices to help guide investors and provide “uplift” to the city-state’s overall ESG environment.
The exchange hopes to “tap into a growing pool of investments committed to good governance and sustainability”.
The exchange said Sustainalytics provided the ESG research and ratings for SGX-listed companies, and the ratings underpin the SGX Sustainability Indices. The four indices are the SGX Sustainability Leaders Index, SGX Sustainability Index, SGX Sustainability Leaders Enhanced Index and the SGX Sustainability Enhanced Index
The SG Sustainability Leaders Index comprises listed companies that are considered “clear frontrunners” in ESG standards compared to peers.
Exchange Chief Executive Loh Boon Chye said: “Investors across the globe are placing increasing importance on ESG, resulting in significant growth of assets under management allocated to ESG strategies and growing demand for transparent benchmarking tools.”He went on to say the new indices provide “a transparent avenue” through which investors can assess the sustainability practices of SGX-listed companies and identify ESG leaders.
Sustainalytics’ CEO Michael Jantzi added: “SGX is playing a leading role in advancing sustainability issues globally. We hope as a result of their new family of Indices, increasing numbers of SGX-listed companies will enhance their disclosure around ESG issues, enabling investors to make more informed decisions.”
The launch follows the introduction of sustainability reporting for listed companies on a “comply or explain” basis. Link
The stated objectives for the new indices:
- Provide guidance for investors that consider ESG factors before investing in SGX listed companies
- Improve the profile and exposure of companies with good ESG practices
- Encourage sustainability disclosures by giving companies an opportunity to differentiate themselves in the market
- Uplift Singapore’s overall ESG environment through enhancing the legal and regulatory sustainability framework
- Tap into a growing pool of investments committed to good governance and sustainability.