SGX plots sustainable partnership

SGX plans to sign up to the UN's Sustainable Stock Exchange Initiative, FinanceAsia can reveal.

The Singapore Exchange will sign up to the Sustainable Stock Exchange Initiative next week, becoming the latest global bourse to market itself as a hub for green investors.

The SGX will become a partner exchange to the initiative on Tuesday, according to a series of emails seen by FinanceAsia. The Sydney Stock Exchange and the Abu Dhabi Securities Exchange are also thought to be joining as partner institutions.

The Sustainable Stock Exchange Initiative (SSE) was created by the United Nations as a talking-shop for global exchanges hoping to win a slice of the growing environmental, social and corporate governance (ESG) investor base. But in 2012, it made a small advancement: creating partner exchanges that make an open commitment to sustainability.

The list of partner exchanges is already widespread, ranging from behemoths like the London and New York exchanges to minnows like national exchanges in Latvia and Sri Lanka. Among the larger Asian exchanges, Bursa Malaysia, the Bombay Stock Exchange, the National Stock Exchange of India, the Stock Exchange of Thailand, and Korea Exchange are already partner institutions.

A spokeswoman confirmed the SGX would sign as a partner of the SSE on Tuesday, but declined to comment further. 

Singapore Exchange executives are planning to announce the news on Tuesday, the first day of an ESG conference run by Principles for Responsible Investment (PRI), an independent body supported by the UN. The SSE Global Dialogue, held every two years, will also take place in Singapore around the same time.

Singapore will not entirely hog the limelight. Representatives from the Abu Dhabi exchange will attend the announcement event in the Marina Bay Sands, according to the emails. 

The SGX has been raising its engagement with ESG as the principles have gradually been embraced by global and increasingly Asian pension funds and insurance companies. It announced the introduction of its Sustainability Reporting Guide and rules in June, which are set to take effect from the beginning of 2018. These will include the introduction of sustainability reporting for listed companies on a “comply or explain” basis.  

The bourse also launched the SGX Sustainability Indices in May, which consist of Singapore-listed stocks that rank well based on ESG research and ratings from Sustainalytics.

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