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Singapore Exchange teams up with Trucost on environmental risk

Environmental analysis firm Trucost has linked up with the Singapore Exchange (SGX) to help Asian listed companies better understand their environmental impacts.

The two firms have launched the SGX Environmental Benchmark Insights programme to help companies “understand their natural resource dependency and optimise their operations in line with resource availability”.

SGX-listed companies will be offered a ‘corporate briefing’ – identifying their significant environmental impacts, profits at risk from future environmental costs and sector-specific challenges – and a ‘benchmark’ module that provides peer assessments of environmental performance and reporting.

Neil McIndoe, Trucost’s London-based head of environmental finance, said the firm had yet to work with any of the SGX companies, but had already advised several Asian corporations – including LG, Samsung and Korea Telecom – as well as some of the banks that invest in and analyse SGX-listed companies.

He noted that water was probably the largest environmental risk for Asian companies, particularly if their supply chains are considered. “Trucost calculates that more than a quarter of profits of the world’s biggest companies would be wiped out if water was priced to reflect its value,” he said.

Mita Natarajan, head of corporate Services at Singapore Exchange, said: “We recognise that companies that act now to reduce risk from natural resource dependency stand to achieve competitive advantage from reduced input costs and better access to capital in the future.”

Only a handful of stock exchanges, such as the Johannesburg Stock Exchange, mandate sustainability reporting for their listings. And only 36% of companies in the Asian MSCI index report on their environmental impacts compared with 72% of MSCI Europe companies and 58% of S&P 500 companies.

SGX lists around 450 domestic firms, 150 foreign firms and 150 Chinese firms.

By: Christopher Cundy
Environmental Finance

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