Singapore Exchange (SGX) on Tuesday (December 15) said it is strengthening its sustainability capabilities and initiatives with a S$20 million (US$15 million) investment plan.
Half of the amount will go towards new environmental, social and governance (ESG) products, services and platforms, while the other half will be channelled into capacity building for the financial ecosystem, strengthening internal capabilities and increasing corporate social responsibility (CSR) commitments, according to the exchange. All sustainability initiatives will be housed under the newly launched platform SGX FIRST (Future in Reshaping Sustainability Together).
The exchange said the initiatives span across asset classes including fixed income, equities, commodities and indices.
For fixed income, SGX says it will capitalize on its exclusive partnership with the Nasdaq Sustainable Bond Network Initiative. The network aims to be the leading source of information on green, social and sustainability bonds, both listed and unlisted, to help global investors conduct due diligence, selection and monitoring of these bonds.
The network covers over 4,500 bonds to-date, predominantly originating from the United States and Europe. SGX plans to enhance data access and transparency of sustainable bonds in Asia-Pacific by bringing regional issuers onto the network, providing a valuable component of global data onto the network and quality data to regional clients in collaboration with Nasdaq.
For equities, SGX has expanded its existing indexing partnership with FTSE Russell, Morningstar Sustainalytics and MSCI to provide ESG ratings on companies listed on SGX. Over 30 of the most recognizable SGX-listed companies are initially covered, with plans to expand coverage in 2021.
Says SGX chief executive officer Loh Boon Chye: "As a market operator and regulator, we can influence and drive greater commitment to sustainability and greener financial markets. An essential element in creating sustainable capital markets is knowledge; through the SGX FIRST platform, we aim to equip investors and issuers in this region with greater ESG knowledge and provide them with better access to a wider range of ESG-related information.
“This will complement the new risk management and investment products centred on ESG factors that will be developed in the next few years. With stronger collaboration within the ecosystem, we can make a difference in sustainability starting from Singapore, in Asia and eventually across the world.”