ESG snapshot: Recent developments of interest
SINGAPORE
New climate and board diversity disclosures recently introduced by the Singapore Exchange take effect this year. They include:
- New climate reporting requirements, which stipulate that issuers must provide climate reporting on a "comply or explain" basis in their sustainability reports, from the financial year (FY) 2022 onwards;
- New sustainability reporting requirements, which include issuers having to subject their sustainability reporting processes to internal review, and having to issue their sustainability reports together with their annual reports unless they have conducted external assurance;
- Enhanced board diversity requirements, such as issuers being required to set a board diversity policy that addresses gender, skill and experience, and other relevant aspects of diversity.
HONG KONG
Hong Kong's recently revised Corporate Governance Code and Listing Rules take effect this year. They include:
- More stringent requirements on listed companies when it comes to board independence; for example, listed companies must have a mechanism to ensure that independent views are available to the board, and they must conduct annual reviews of its efficacy;
- New rules on board diversity, which bar single-gender boards;
- Disclosure requirements, such as listed companies having to disclose their shareholders' communication policy, and having to publish their ESG reports at the same time as their annual reports.
EUROPEAN UNION (EU)
Update on the EU Taxonomy Regulation - which sets out conditions an economic activity has to meet in order to qualify as environmentally sustainable, enabling member states to move towards climate neutrality:
- The European Commission (EC) is in consultation with member states over controversial plans to allow certain gas and nuclear activities into the taxonomy, and has just pushed back the deadline for views to be submitted;
- Not all member states are in agreement with the EC's view that there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future.
