Both bourses are seeking to incorporate the TCFD recommendations into their sustainability reporting regimes, extending a trend of convergence in regional ESG reporting standards.

By Paul A. Davies, Timothy Hia, and Sabrina Singh

On August 26, 2021, the Singapore Exchange Regulation (SGX RegCo) released a consultation paper proposing amendments to the sustainability reporting (SR) regime of the Singapore Exchange (SGX). The proposed changes would require Singapore-listed issuers to move toward including in their sustainability reports climate-related disclosures that are consistent with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD Recommendations).[1] As part of the same paper, SGX RegCo is also seeking to require issuers to maintain and monitor a board diversity policy.

Singapore’s Proposed Amendments

Climate-Related Disclosures

The consultation paper notes that while the SR regime has been in force since 2016, there remains an urgent need to enhance the quality and consistency of climate-related disclosures.[2] As an example, only about 2% of issuers in a recent SR survey said they use climate-focused frameworks to guide their disclosures.[3] To strengthen the SR reporting framework, SGX RegCo is seeking comments on a proposed roadmap that would phase in a mandatory climate reporting regime over time, and tie climate-related disclosures more closely to the TCFD Recommendations. The consultation paper proposes to roll out mandatory reporting for issuers in certain key sectors (as of now, unspecified)[4] at the start of 2023, with other issuers being required to submit reports on a “comply or explain” basis.[5]

The proposed amendments to the SR regime include, for the first time, a specific reference to the TCFD Recommendations. SGX RegCo intends to bolster the practice notes to the listing rules by mapping out the TCFD Recommendations as they relate to specific reporting requirements within the SGX listing manual. The proposed amendments seek to further incorporate the TCFD Recommendations into the SR Regime by including new sections on metrics and targets relating to (among other things) Scope 1, Scope 2, and Scope 3 greenhouse gas (GHG) emissions and related risks, as well as short, medium, and long-term targets relating to material environmental, social, and governance (ESG) factors.[6] These disclosures are proposed to be supported by an enhanced assurance framework that calls for external assurance measures to be applied in accordance with internationally recognized assurance standards. However, SGX RegCo has stopped short (at least for the present) at prescribing a specific ESG reporting framework, although the consultation paper suggests that this could become an area of focus in the future.[7]

Board Diversity

The consultation paper proposes requirements for issuers to adopt a diversity policy, and to disclose in their annual reports “targets for achieving the stipulated diversity, accompanying plans, and timeline for achieving the targets.”[8] Singapore-listed issuers are currently requested to make these disclosures on a “comply or explain” basis, but the proposed changes would elevate this request to a mandatory requirement, consistent (as the consultation paper notes) with corresponding regimes in Australia, Hong Kong, Malaysia, and the United Kingdom.[9] In addition, SGX is seeking comments on whether gender should be a mandatory component of diversity policies.[10]

Developments in Hong Kong

Climate-Related Disclosures

The Stock Exchange of Hong Kong (HKEx) has already implemented a “comply or explain” regime that requires issuers to disclose “[p]olicies on identification and mitigation of significant climate-related issues which have impacted, and those which may impact, the issuer.”[11] Further, Hong Kong’s Green and Sustainable Finance Cross-Agency Steering Group recently announced that it is seeking to align climate-related disclosures with the TCFD Recommendations by 2025, and to make such disclosures mandatory across relevant sectors.[12]

Board Diversity

HKEx released a consultation paper last spring proposing mandatory disclosure of gender diversity targets for boards and across the workforce as well as a requirement for boards to monitor the progress of their board diversity policies on an annual basis.[13] The consultation paper states that diversity is not considered to be achieved with a single-gender board and that existing issuers would be allowed a three-year transition period to appoint a director of the absent gender if the rule came into effect.[14]


The amendments that Singapore and Hong Kong have proposed to their disclosure rules harmonize with the global trend of convergence in disclosure standards. SGX RegCo’s paper notes, for example, that the United Kingdom has published a roadmap for mandatory TCFD-aligned disclosure obligations across the economy by 2025 and that Australia has encouraged its issuers to reference the TCFD Recommendations.[15]

Given the regional appeal of both the SGX and HKEx, these amendments could well have a positive impact on issuers across the Asia-Pacific region, including mainland China, which aims to reach peak carbon emissions by 2030 and has numerous companies listed in HKEx.[16]

Latham & Watkins will continue to monitor developments in this area.



[1] SGX, Consultation Paper, “Climate and Diversity: The Way Forward,” August 26, 2021. at Part II, para. 1.8-1.9. The TCFD Recommendations are a reporting framework for climate-related disclosures developed in 2017. The Recommendations are structured around four thematic areas: governance, strategy, risk management, and metrics and targets. For more, see:

[2] Supra n. 1 at Part II, para 1.6.

[3] Supra n. 1 at Part II, para 1.5.

[4] The paper states that “[s]ectors with the highest climate-related risks should be prioritised in mandatory climate reporting, as this would be most impactful.” Ibid. at para. 1.13.

[5] Supra n. 1 at Part II, para. 1.10.

[6] Supra n. 1 at para. 1.18.

[7] The paper notes that sustainability reporting frameworks are “a developing area” and therefore “do[es] not consider it appropriate at current juncture to prescribe specific sustainability reporting frameworks” but that in the future, if certain standards gain market acceptance, SGX would be open to adopting a uniform standard. Supra n. 1 at para. 2.10-2.12.

[8] Supra n. 1 at para. 7.8.

[9] Supra n. 1 at para. 1.11.

[10] Supra n. 1 at para. 7.9.

[11] Ibid. Other KPIs include emissions, environment, and natural resources as well as social issues such as employment, labour standards, and supply chain management.

[12] Hong Kong Monetary Authority, “Cross-Agency Steering Group announces next steps to advance Hong Kong’s green and sustainable finance strategy,” July 15, 2021, available here:

[13] HKEx, Consultation Paper, “Review of Corporate Governance Code and Related Listing Rules,” April 2021. Para. 23-24.

[14] Ibid at para. 25.

[15]  Supra n. 1 at para. 1.11.

[16] International, “Chinese Companies Get ESG Guidance from Hong Kong,” September 6, 2021, available here: