Singapore Exchange (“SGX”) Responses to Feedback on Climate and Diversity for Listed Companies

Singapore Exchange (“SGX”) Responses to Feedback on Climate and Diversity for Listed Companies

Introduction and Background

Back in December 2021, SGX, in contribution to battling climate change and the effects of COVID-19 on the globe, released the finalized common set of core ESG metrics on climate and diversity to tackle the issues on hand and be part of the global solution. This is following the comments received on its public consultation which sought public feedback and opinion on the topic, including matters such as mandatory climate-related disclosures, directors training on sustainability, board diversity policy, targets and progress, and internal review of sustainability reporting by their internal auditors.

The intention is to provide guidance on standardizing the ESG metrics during company disclosures and to facilitate comparability of ESG data disclosures across the companies. In pursuit of this practice, SGX has envisaged a list of core ESG metrics and published guidelines addressing Environmental, Social and Governance issues. Notwithstanding, companies should not be limited to the list of Core ESG metrics and should still conduct a materiality assessment to ensure the relevance and completeness of their reported metrics within their organization. More information is available on the SGX website.

What It Means for Mainboard and Catalist Listed Companies?

The regulators define “environmental risk” as risks that arise from the potential adverse impact of changes in the environment on “economic activities and human well-being”. For the first year of sustainability reporting, companies should minimally identify and establish its material ESG factors, policies, and practices to address these risks. When the reporting lacks qualitative or quantitative descriptions, companies need to state progressive targets for reaching maturity of reporting to meet the requirements in subsequent years.

A. Mandatory Climate-related Disclosures

The SGX will be taking a phased implementation approach in mandating climate reporting over three (3) years as summarized below. The phased approach is prioritized based on the TCFD-identified Industries, of which SGX has kindly mapped it out against the Thomson Reuters sector classification for ease of understanding.

For Financial Year


Baseline Reporting Practice Calendar Year in which Report Published
January 1, 2022 For all issuers: Climate reporting on a ‘comply or explain’ basis. 2023
January 1, 2023 For issuers in (a) financial industry; (b) agriculture, food and forest products industry; and (c) energy industry: Climate reporting on a mandatory basis.


For other issuers: Climate reporting on a ‘comply or explain’ basis.

January 1, 2024 For issuers in (a) financial industry; (b) agriculture, food and forest products industry; (c) energy industry; (d) materials and buildings industry; and (e) transportation industry: Climate reporting on a mandatory basis.


For other issuers: Climate reporting on a ‘comply or explain’ basis.


Source: SGX Sustainability Reporting Guide

In addition to the list of core ESG metrics mentioned above, the International Financial Reporting Standards (“IFRS”) is expected to finalize the publication on climate reporting standard in 2022, this will build on the Task Force on Climate-related Financial Disclosures (“TCFD”) recommendations. SGX will monitor the progress in climate reporting and introduce mandatory climate reporting based on the finalized climate reporting standard for all companies subsequently.

Similarly, Monetary Authority of Singapore (“MAS”) is planning a consultation on mandating disclosures by financial institutions which expects banks, insurers, and asset managers to make climate-related disclosures in accordance with internationally recognized frameworks such as the TCFD Recommendations from June 2022.  Tricor Axcelasia has previously touched on this topic which is available here: Environmental Risk Management (“ERM”) – Financial Institutions (“Fls”) are Encouraged to Go Green to Save the Planet (

B. Directors Training on Sustainability

In regard to prescribed training on the roles and responsibilities of a Director of a company listed on SGX, prior to the proposed amendments, the Nominating Committee may assess that training is not required for a First-time Director due to other relevant experience. However, disclosure of the basis used for these assessments must be made in the Sustainability Report.

The responses to feedback require both first-time and existing directors to undergo trainings relating to sustainability. SGX is working with Singapore Institute of Directors (“SID”) to expand the scope of the mandatory training to include a specific component on sustainability for all First-time Directors, as well as in discussion with other service providers on appropriate sustainability trainings for the existing directors. Listed companies are required to provide a confirmation that their directors have attended the sustainability training in their first sustainability report for financial years commencing on or after January 1, 2022.

C. Board Diversity Policy, Targets and Progress

Thirdly, SGX expects companies to have an appropriate mix of board diversity to provide broad-based judgement in managing its risk and opportunities. Besides the governance level, the list of core ESG metrics recommends that companies should disclose senior management diversity as well if it is considered to be a material ESG factor.

In addition to the existing Corporate Governance (“CG”) requirements on board diversity, companies are now required to disclose in its annual report its board diversity policy, which includes the targets being set to achieve diversity on its board with the accompanying plans, timelines and progress status. A description of how the combination of skills, knowledge, experience and diversity (see examples below) of its Directors serve the needs and plans of the company shall also be disclosed.

In the inaugural Singapore Board Diversity Index that SID launched last year, eight (8) aspects of board diversity were identified i.e. age, gender, industry expertise, domain or functional expertise, tenure, board independence, cultural ethnicity and international experience. Cybersecurity expertise may also increasingly be important given the prevalence of the use of electronic communications in business.

These enhancements are required to be adopted for financial years beginning on or after January 1, 2022.

D. Internal Review of Sustainability Reporting

The latest SGX responses call for all listed companies’ sustainability reporting process to be subjected to an internal review by the internal audit function, extending from the existing Listing Rules, which requires issuers to have adequate and effective systems of internal controls and risk management systems. The internal review should be conducted in accordance with the International Standards for the Professional Practice of Internal Auditing issued by The Institute of Internal Auditors.

However, at this juncture, a company may (not mandatory) appoint an independent external assurance on the sustainability report. The scope should minimally include assurance on the accuracy and completeness of the data collection process and data being reported, narratives, compliance with the Listing Rule and specified sustainability reporting framework. The existing requirement in the Sustainability Reporting Guide for companies to conduct external assurance and to include a summary in its annual report shall maintain.

Where the company has conducted external assurance on the sustainability report, the sustainability report (standalone) may be released within five (5) months after the end of the financial year, with a summary included in the annual report. Otherwise, the issuance of the sustainability report shall be issued together with its annual report, no later than four (4) months after the end of the financial year.

Implementation Summary / What Are the Next Steps?

Depending on the specific sector / industries, companies have a little more than a year to begin working on addressing the requirements as soon as practicable. Companies shall begin reviewing its Sustainability Reporting Frameworks and ESG Indicators (specifically for climate reporting) as a start, based on the relevance to their business and engagement with stakeholders.

Aligning to the above Sustainability Reporting Framework and list of core ESG metrics issued by SGX, Directors shall gather and discuss on the target, plans and timeline relating to board diversity, taking into account the companies’ current plan and future strategy.

While it is mandatory for an internal review conducted by internal audit function companies have the choice on whether to appoint external assurance for their sustainability reports. Companies shall incorporate the review of the sustainability reporting processes in its internal audit plan, thus subjecting it for regular review and monitoring.

About Tricor Axcelasia 

Tricor Axcelasia provides ongoing compliance support and regulatory updates to support companies in their strategic directions. Our team of compliance experts assist FMCs in developing robust policies, manuals and checklists to safeguard the companies against breaches of prevailing laws, regulations and standards.

Depending on the size and nature of your business, Tricor Axcelasia recommends regular compliance health checks and reviews to ease fears of unexpected breaches or misconduct by employees, executives or service providers. 

In accordance with MAS expectations, Tricor Axcelasia provides internal audit services to assists FMCs in independently assessing the adequacy and effectiveness of internal controls and provide recommendations for improvements.

Tricor Axcelasia is an integrated professional services group providing strategic business advisory and governance risk & compliance (“GRC”) systems to publicly listed companies, private companies, multinational corporations and government-linked entities. We help organizations build their capabilities in strategic planning and execution by identifying and anticipating potential risks, and sharing comprehensive expertise in business management.

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