To 2021 And Beyond – A Regulator’s Perspective

SGX RegCo chief Boon Gin Tan says sustainability is now a new fiduciary responsibility, and expectations in this area have never been higher.

I attended and spoke at several conferences and panel discussions in November. While these were different events put together by organisations including Global Compact Network Singapore, the Financial Times, Association of Corporate Treasurers, Singapore Institute of Directors, and REIT Association of Singapore, they all had a similar link – COVID-19. COVID-19 has swept across the globe, broken up supply chains, shuttered businesses and rendered masses of individuals jobless. The pandemic has become a common thread for discussion and introspection across typically unconnected events.

The first of the slew of events I mentioned was the Global Compact Network Singapore CEO roundtable on Sustainable Finance which I had the privilege of attending. What struck me was Senior Minister Teo Chee Hean’s excellent speech. In particular, he described how, because of COVID-19, we are moving from (a) just in time to just in case, (b) short-term transactions to long-term relationships, and (c) high-frequency indicators to long-term sustainable value.

This was a mindset change, no less. As an exchange and in particular in my position as a frontline market regulator, I can see several roles we can play in this shift in thinking.

  • As a repository for knowledge, resources and data: We can help equip companies with the skills to produce quality sustainability reports. We can also educate investors to read these reports to understand how companies are building resilience and managing their business for the long term.
  • As a curator to ensure high-quality sustainability reporting: Our listing rules prescribe the requirements for sustainability reports and establish a baseline for listed companies. Our initiatives to review companies’ reports and highlight areas for improvements are another means to point the way forward for companies towards better-quality data and information. At the same time, we have also shifted attention from short-term profits towards longer-term financial health through the removal of mandatory quarterly reporting and moving towards a targeted risked based approach. This year, we surveyed institutional investors to discover what they want and value in sustainability reports and how the information is used. By bridging the gap between what companies are detailing in their reports, and what investors find useful or expect, we hope to help companies better position sustainability reports as part of the decision-making material investors need. Companies that report meaningfully may also attract ESG-focused investors. We may also fine-tune our rules accordingly based on findings from the review and survey.
  • As a translator of the companies’ sustainability reporting into actionable things. We are looking to introduce meaningful sustainability ratings, scores, or products such as exchange-traded funds or futures contracts that are directly usable by investors.

Singapore Exchange CEO Loh Boon Chye has highlighted SGX’s bold steps to influence and drive greater commitment to sustainability and greener financial markets, together with the ecosystem. While sustainability is not new to SGX, we can do more as a market operator and regulator. Details on SGX’s launch of FIRST (Future in Reshaping Sustainability Together) are found at

What SM Teo said really set the tone for the subsequent panel discussions I was on. Once again, sustainability was a key theme. But discussions and comments made on it carried a noticeable urgency. In particular, I noted three main developments: (1) sustainability is a new fiduciary responsibility, (2) scrutiny has intensified and (3) timeliness is top-of-mind.

No longer a nice-to-have

Sustainability is now a new fiduciary responsibility. On the environmental front, international obligations such as the Paris Agreement and national commitments such as China’s net zero pledge to be carbon-neutral by 2060 will translate into climate-related requirements, penalties for non-compliance and incentives for outperformance. On the social and governance fronts, progress is also occurring. To all non-believers, it is time to get on board and get on with it. As SM Teo put aptly: “It is clear that we cannot return to the status quo or business-as-usual – not when countries, businesses and networks are brought to their knees so easily.”

Scrutiny, scrutiny and more scrutiny

Scrutiny has never been more intense than at this time. The attention paid to COVID-19 data is one good example. Eyeballs everywhere are squarely focused not just on local, but also global data. The scope of interest has gone past macro developments such as on the government front to businesses to even actions or non-actions of individuals. Earlier this month, US oil giant ExxonMobil announced its new emission targets and plans to report Scope 3 emissions data for the first time. This after facing intense criticism from investors, who alleged that their emissions targets are inadequate. Shareholders including BlackRock indicated that they would vote against the re-election of some directors over concerns on ExxonMobil’s ability to make progress to diversify its portfolio, or else to restructure its board of directors. Expectations have never been higher, not just for pandemic-related issues but indeed for every topic that matters. And propriety is now measured against the spirit rather than just the letter of the law.

In real time please

Finally, that growing expectation has extended to timeliness. In life as in sport, live commentary rather than a match report, is now expected. Many people have expressed their appreciation to me whenever I address real, current and pressing issues. I sense a demand for “leading” rather than “lagging” indicators.


Singapore is easing gradually into what we call Phase 3 of the COVID-19 scenario. The expectation seems to be that this marks the final phase towards normalization albeit we are unlikely to return to the previous normal. Everybody has been talking about how the crisis has accelerated digital and workplace transformation.  I think what has gone unnoticed is that it has accelerated the maturity of our market as well, as evidenced by the changes I have highlighted above. This is a positive development and I look forward to another year of accelerated growth as we continue to demand more of and be more responsible to, every one of us in the market community.

Boon Gin Tan is CEO of SGX RegCo. This commentary was first published in The Business Times on 23 December 2020.

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