SGX launches sustainability indices

The Singapore Exchange Centre at 2 Shenton Way.
The Singapore Exchange Centre at 2 Shenton Way. PHOTO: ST FILE

Local bourse operator, the Singapore Exchange (SGX), yesterday announced a new set of equity indices - called SGX Sustainability Indices.

The four new indices include the flagship SGX Sustainability Leaders Index, comprising listed firms that are considered to be "clear frontrunners in environmental, social and governance standards" when compared with their peers.

The 24 firms on the leaders index include Singapore Airlines and Singapore Press Holdings.

SGX partner Sustainalytics provided the research and ratings for listed firms, and "the ratings underpin the indices", said SGX in a statement.

Besides meeting the necessary environmental, social and governance requirements, companies must also meet minimum liquidity requirements in order to qualify.

SGX chief executive Loh Boon Chye said the indices offer a transparent way for investors to assess the sustainability practices of listed firms. The aim is to raise the profile of firms with strong practices.

SGX chief executive Loh Boon Chye said in a statement that investors around the world are placing increasing importance on sustainability factors, "resulting in significant growth of assets under management allocated to environmental, social and governance strategies and growing demand for transparent benchmarking tools".

He said the indices offer a transparent way for investors to assess the sustainability practices of listed firms. The aim is to raise the profile of firms with strong practices.

Sustainalytics chief executive Michael Jantzi wants the indices to encourage more firms to increase disclosure about such practices, which will let investors make better informed decisions.

Cambridge Industrial Trust also made it to the flagship list, and Mr Philip Levinson, chief executive of the trust's manager, said: "There is still a lot of work ahead of us and the team remains committed to our goal of becoming one of Asia's greenest industrial real estate investment trusts.

Mr Grant Kelley, chief executive of City Developments, another firm on the main index, said this is timely and will "elevate the importance of environmental, social and governance performance for Singapore-listed companies, and enhance Singapore's standing among the global investment community".

A version of this article appeared in the print edition of The Straits Times on May 31, 2016, with the headline 'SGX launches sustainability indices'. Print Edition | Subscribe