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Singapore – SGX Releases Additional Guidance On Anti-Corruption In Sustainability Reporting Guide For Listed Companies.

1 September, 2014

 

Legal News & Analysis – Asia Pacific – Singapore  Regulatory & Compliance

 

On 27 June 2014, the Singapore Exchange Securities Trading Limited (“SGX”) announced that as part of its on-going efforts to enhance sustainability amongst SGX-listed companies, the SGX has produced additional guidance on anti-corruption in the SGX Guide to Sustainability Reporting for Listed Companies (“Sustainability Reporting Guide“).


The SGX officially launched the Sustainability Reporting Guide on 27 June 2011 to provide guidance to listed companies on “sustainability reporting” which refers to the disclosure of environmental, social and governance (“ESG“) information in a comprehensive and strategic manner that reflects the activities and outcomes across these three dimensions of an organisation’s performance. The Sustainability Reporting Guide explains that sustainability reporting is a voluntary exercise and is in addition to the disclosure of financial and governance aspects that are already part of the mandatory disclosure required under the Code of Corporate Governance. 


The SGX recognises that, beyond the ESG aspects of the ten principles of the United Nations Global Compact which are already covered under the Sustainability Reporting Guide, the anti-corruption aspect has gained importance in recent years across the global capital markets and should be given the same degree of attention and disclosure as the ESG aspects. 


Prior to the SGX’s release of additional guidance on anti-corruption, the Sustainability Reporting Guide broadly addressed the anti-corruption aspect under Section 5.2 setting out that the SGX encourages listed companies to consider and provide, among other things, disclosure on their corporate stance on bribery and corruption, where material to their business operations.


With the current update to the Sustainability Reporting Guide, the SGX has introduced a new Section 5.4 to provide additional guidance on anti-corruption disclosure, which sets out that anti-corruption, being one of the ten principles under the United Nations Global Compact, deserves equal attention as other ESG principles and that listed companies should look beyond perfunctory observance of home laws and adopt policy and procedures relevant across the jurisdictions in which they operate and consider their reach down the supply chain, and report on implementation and compliance. 


Under the United National Global Compact, the anti-corruption principle which the SGX has acknowledged above provides that businesses should work against corruption in all its forms, including extortion and bribery. 


The additional guidance provided by the SGX on anti-corruption disclosure is part of the SGX’s baseline for holistic reporting going beyond corporate governance and listed companies are now expected to consider the anti-corruption principle, in addition to the ESG aspects, in formulating their sustainability reporting frameworks.

 

ATMD Bird & Bird

 

For further information, please contact:

 

Marcus Chow, Partner, ATMD Bird & Bird

marcus.chow@twobirds.com

 

Hazel Ho, ATMD Bird & Bird

hazel.ho@twobirds.com

 
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