Singapore Exchange (SGX Group) has launched a new intiative to identify green, social and sustainability fixed income securities that meet recognised standards.
The initiative will help investors to identify investments that meet certain criteria at issuance better.
The criteria includes the alignment with recognised green, social or sustainability standards for fixed income securities, confirmation by an external reviewer that the fixed income securities are aligned to the recognised standards, as well as public records that set out the fixed income securities' alignment with the recognised standards.
Issuers may use an SGX Sustainable Fixed Income mark to identify the securities as having met these requirements.
To continue being recognised as part of the initiative, issuers must publish any post-issuance reports such as the annual report as well as information that may affect alignment with the recognised standards.
Issuers applying to list and quote fixed income securities on the SGX securities market may also submit an application for recognition under the SGX Sustainable Fixed Income initiative at the same time.
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“The purpose of financial innovation must be to provide real life solutions. The SGX Sustainable Fixed Income initiative enables investors to easily identify fixed income securities that are issued to embark on sustainable projects meeting market expectations,” says Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo).
“Investors will benefit from knowing that these bonds have been independently checked for 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,” he adds.
“This recognition will help SGX Sustainable Fixed Income products stand out from among the close to 6,000 bonds listed on SGX at any one time. Issuers can use the recognition to demonstrate their commitment to these well-understood standards and raise their visibility and profile to investors who are interested in sustainable fixed income securities,” says Lee Beng Hong, head of fixed income, commodities & currencies, SGX Group.
According to SGX RegCo, around 200 of SGX-listed fixed income securities already meet the SGX Sustainable Fixed Income criteria and they would be onboarded over the next few months.
