THE Singapore Exchange (SGX) has launched an initiative to help investors to more easily identify green, social and sustainability fixed income securities that meet recognised standards.

The SGX Sustainable Fixed Income initiative will recognise securities aligned with accepted green, social or sustainability standards for the asset class. Some examples of such standards include the International Capital Market Association’s (ICMA) Green Bond Principles, the ICMA’s Social Bond Principles and the Asean Sustainability Bond Standards.

This alignment must also be confirmed by an external reviewer with an established track record of providing similar reviews, SGX said on Monday (Nov 28) when the initiative launched. Issuers must also have publicly published reports setting out the fixed income securities’ alignment with the recognised standards.

“Sustainable investing is gaining momentum, and SGX Group anticipates that such an assurance may therefore be helpful for other asset classes,” said Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo).

SGXX RegCo estimates that some 200 of SGX-listed fixed income securities already meet the criteria, and will be onboarded over the next few months.

Green, social and sustainability fixed income securities considered under the initiative refer to fixed income securities where the use of proceeds are earmarked for specific sustainable projects, based on specified principles.

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Sustainability-linked fixed income securities – where the proceeds are used for general corporate purposes but have performance-based metrics based on pre-defined sustainability performance targets – are still under review for eligibility “as the market for such securities evolves and develops”, SGX said.

Issuers applying to list fixed income securities on the exchange may submit an application to be recognised under the SGX Sustainable Fixed Income initiative at the same time. Both applications will be reviewed concurrently.

Issuers must also publish any post-issuance reports, such as annual reports, as required under the applicable recognised standard, to continue being recognised under the initiative.

SGX may remove the recognition if issuers do not publish their reports required under the applicable recognised standards.