DPM Heng Swee Keat at the Launch of the SGX Sustainability Reporting Review

DPM Heng Swee Keat | 23 November 2023

Speech by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat at the launch of the SGX Sustainability Reporting Review on 23 November 2023.


Professor Tan Eng Chye, President, National University of Singapore,
Mr Tan Boon Gin, Chief Executive Officer, Singapore Exchange Regulation,
Professor Lawrence Loh, Director, NUS Centre for Governance and Sustainability,
Ladies and gentlemen,

Good morning. It is a pleasure to join you today to launch the Sustainability Reporting Review 2023.

While this is the third edition, it is the first review since SGX’s Listing Rules introduced climate-related disclosures as a primary component of sustainability reports.

As Eng Chye mentioned, sustainability reporting is an increasingly important part of companies’ public communications.  

It demonstrates businesses’ commitment to addressing key challenges and investing for the long-term.

Reflecting the rising expectations of businesses’ responsibilities to Environmental, Social and Governance – or ESG – issues, more and more stock exchanges have issued ESG reporting guidelines over the years.

In 2015, less than 10% of stock exchanges around the world provided guidance on ESG reporting. Today, the figure is 59%.

Here in Singapore, SGX has progressively introduced rules requiring our listed companies to publish sustainability reports since 2017.

This latest review offers a comprehensive evaluation of sustainability reporting by more than 530 listed companies in Singapore across sectors and revenue sizes.

I am happy to hear that 99.6% of eligible listed companies, practically all of them, released their latest sustainability reports in time to be assessed.

This signals our companies’ commitment to address the global sustainability and climate challenge.

Indeed, sustainability has become an increasingly salient pillar of good corporate governance.

There is growing acceptance that climate change is the defining existential challenge of our times.

A UN report earlier this week noted that 97 countries have now adopted net-zero pledges, up from 88 a year ago.

This includes most of the G20 member countries, which are the world’s largest economies. Notwithstanding this positive momentum, much remains to be done.

The same report estimated that global greenhouse gas emissions must be reduced by more than 40% by 2030, if we are to meet the 1.5-degree Celsius goal stated in the Paris Agreement.

This will require the collective effort of countries, governments and businesses. Stewarding a green and more sustainable world is a shared responsibility.

As a small and climate-vulnerable island state, Singapore understands the importance of addressing the climate challenge. While we only account for 0.1% of global greenhouse gas emissions, we must and will do our part.

In 2021, we launched the Singapore Green Plan 2030 – a whole-of-nation roadmap on sustainable development with ambitious and concrete targets over the next 10 years.

Last year, Singapore announced our target of achieving net-zero emissions by 2050.

To strengthen the price signal and impetus for businesses to reduce their carbon footprint, Singapore also became the first country in Southeast Asia to implement a carbon tax in 2019.

We are raising this progressively in stages until 2030.

The pricing trajectory should nudge businesses to invest in low-carbon solutions, so as to remain competitive in a low-carbon future.

The revenue collected from the carbon tax will be used to support the transition to a low-carbon economy, as well as cushion the impact on businesses and consumers.

The Government has also set out clear targets to lead the way in Singapore’s sustainability journey.

The public sector has committed to achieving net-zero emissions around 2045, five years ahead of the national target.

By 2030, the public sector aims to reduce energy and water usage by 10%, and to reduce the amount of waste disposed by 30%.

From 2024, the Government will progressively introduce environmental sustainability considerations into its tender evaluation process, starting with large construction, and information and communication technology tenders.

Our research community, including colleagues at NUS, are stepping up research into new low-carbon technologies, including clean energy alternatives like solar and hydrogen, and piloting promising solutions.

As we pursue this path to sustainability, it is important to measure and disclose our progress. As the saying goes, ‘what gets measured, gets done’. Good disclosures help decision-makers allocate resources to entities and projects that show strong commitment and progress.

It also enables us to learn from one another so that we can adopt more effective practices.

In this regard, the Government is leading by example in reporting how we systematically incorporate sustainability in our decision-making and risk management frameworks to achieve concrete outcomes.

A number of agencies, including the Monetary Authority of Singapore, Maritime and Port Authority and the National Environment Agency, have already been publishing their sustainability reports for some years.

From Financial Year 2023, the Government will publish an annual report tracking the public sector’s efforts, progress and plans in rolling out our sustainability initiatives under GreenGov.SG. And from Financial Year 2024, all statutory boards will be required to publish annual sustainability disclosures.

Given the scale of the climate challenge, every one of us must do our part.

As Government lays out the frameworks, policies and regulations to guide and support Singapore’s sustainability journey, companies and enterprises will play a major role.

SGX has taken the lead by introducing sustainability reporting requirements since 2017. And we are looking to extend this to the broader economy in a phased and proportionate manner.

Our SGX-listed companies are making steady progress on their sustainability reporting.

In particular, it is encouraging that small and medium cap issuers, which comprise around 85% of SGX-listed issuers, posted the strongest improvement in scores between this year and 2019, when the first review was conducted.

As leaders of listed companies, you have a responsibility to steer your enterprises not only for short-term profits but also long-term success.

The growing requirements for sustainability reporting and climate-related disclosures should be framed as a tool to support you in charting your companies’ long-term growth roadmap.

As the momentum for sustainability reporting builds up in the years ahead, you will need to strike the balance between profit and prosperity, and do right by people and the planet.

Let me briefly touch on three ways that corporate leaders can harness sustainability reporting as a business transformation catalyst.

First, corporate leaders should see sustainability reporting as a means of sharpening your competitive edge.

Amid rising competition for capital, sustainability disclosures have a growing role in influencing investment allocation decisions.

Effective sustainability reporting is critical in demonstrating the resilience of business plans and how companies are positioning themselves to capture opportunities from the climate transition.

It demonstrates with transparency that enterprises are committed to pursuing the green transition and have considered the physical and transition risks that need to be managed.

In turn, this will help businesses remain competitive and appealing to present and prospective investors. In particular, adopting internationally-recognised sustainability reporting frameworks allows companies to disclose their sustainability information in a structured and comparable way.

This allows investors to conduct benchmarking across the same set of metrics with other companies.

And this is an area where SGX-listed companies have performed strongly. In fact, I understand that almost all companies in this review adopted at least one sustainability reporting framework.

Second, sustainability reporting can serve as a springboard for innovation.

I earlier mentioned Singapore’s investments in sustainability-related research.

Besides governments, private investments in sustainability research have grown significantly – from clean energy solutions like nuclear fusion, to low-carbon agriculture and smart cities.

But R&D cannot be confined to research institutions or laboratories alone – businesses must adopt, test and scale these solutions in order for them to have tangible impact.

Tracking metrics and targets can therefore help guide companies on how best to use, develop and deploy the latest tools, solutions and technologies to make their business operations and supply chains more sustainable.

I am encouraged to see ground-up initiatives from industry to pursue innovation and adopt new green solutions.

Earlier this week, I attended the launch of a new Sustainability Innovation Lab by the Global Reporting Initiative and the International Financial Reporting Standards Foundation.

A multi-stakeholder collaboration, the lab will help companies, especially those in Asia, meet evolving sustainability disclosure requirements by fostering professional development and training, promoting practical supply chain solutions and innovative thinking.

This brings me to the third and final point, which is that sustainability reporting can enable corporate leaders to nurture and retain future-ready talent.

Today, more workers, especially the younger ones, are attracted to companies that take sustainability seriously. I recently met a banker from Europe who told me that his bank is reviewing its portfolio because young potential employees may boycott you if they don’t see you demonstrating a commitment to sustainability in your logo, actions and investment decisions. His bank is hence now rethinking its portfolio and the relevant risks.

To enable the transition to a greener economy, sustainability skillsets will be a basic requirement across the workforce.

A new report by SkillsFuture found that ESG, carbon footprint management and sustainable manufacturing are the three fastest-growing skills currently in the greeneconomy.

To track progress, companies and enterprises need to invest in developing and nurturing in-house talent in these core areas.

But beyond these areas, companies that equip every worker with the basic knowledge and toolkits will be better placed to draw out good ideas and practices in their sustainability journey from their entire workforce.

Let me conclude. Sustainability is core to Singapore’s future development and the green economy will be a key pillar in driving our next bound of growth. But achieving this transition will require effort and collaboration across different quarters.

The Government is committed to developing and aligning the entire ecosystem to pursue a greener and more sustainable future.

I am glad to that see our Institutes of Higher Learning and research institutes pursuing many important initiatives. On that note, congratulations to NUS for winning the President’s Award for the Environment this year.

The private sector, including SGX-listed companies, must transition to more sustainable business models, and proactively chart your progress through robust sustainability reporting.

Such reporting should be leveraged as an asset to enhance your competitive edge, drive deeper innovation, and develop your talent bench.

In turn, these will ensure your future-readiness and long-term success as global expectations around corporate sustainability – from investors, consumers, clients and even your own workforce – grow.

The review being launched today contains useful and interesting case studies featuring a range of different-sized issuers sharing best practices.

I encourage everyone to read the review, to pick up ideas that may be useful in your context.

I look forward to Professor Lawrence Loh’s presentation on the review’s key findings, and to exploring how we can work together better as an ecosystem to advance Singapore’s sustainability journey. Thank you