Singapore Exchange Ltd. and the Monetary Authority of Singapore launched an ESG disclosure portal Sept. 12 Source: tobiasjo / E+ via Getty Images

Singapore is allowing locally listed companies to disclose environmental, social and governance data as ESG metrics become increasingly crucial to investment decisions.

The Singapore Exchange Ltd. and the Monetary Authority of Singapore, or MAS, on Sept. 12 launched ESGenome, a digital disclosure portal that offers a standardized snapshot of 27 key ESG metrics of companies for investors' use, according to a joint statement.

"We are optimistic that by being front-runners in ESG data disclosure via ESGenome, our listed companies will be in a better position to raise capital and attract international investors who are actively looking for leading ESG firms," said Michael Syn, senior managing director and head of equities at SGX Group.

Additionally, listed companies in Singapore can input data across more than 3,000 ESG metrics into the system based on globally recognized reporting standards and frameworks such as the Task Force on Climate-related Financial Disclosures and the Global Reporting Initiative, depending on materiality and their business needs.

Investors are increasingly looking at thematic and impact investing, with assets in the market expected to double in a few years. This requires a shift from relying on a single aggregated ESG rating score to more granular metrics and source data, according to the statement.

Green finance hub

Singapore has been actively positioning itself as Southeast Asia's green finance hub. The nation on Aug. 4 priced the world's longest-tenor sovereign green bond to finance projects such as electric rail networks. The MAS has also been stress-testing and requiring disclosures to strengthen the industry's resiliency against climate risk.

The sustainable finance industry has repeatedly cited inconsistent reporting standards as one of its top challenges. The inability of listed companies to provide ESG metrics that match investors' or financiers' requirements was one of the reasons behind the creation of this platform, Chan Kum Kong, SGX Group managing director and head of research, said on a call with journalists.

A key feature of the portal is the ability to auto-generate sustainability reports based on metrics and explanations that companies disclose, Chan said. "Ideally, this will help shape [the] disclosure behavior of companies, whereby the sustainability report is more quantitative in nature using SGX ESGenome versus current reporting, which is primarily narrative-driven in glossy PDF reports."

For investors and financial institutions, the ESGenome portal will provide access to relevant and comparable ESG data to enable peer benchmarking and sustainability commitment tracking, according to the statement.

Listed companies in Singapore can now access the portal on a voluntary basis, but investors will have access to it in due course.