Singapore Exchange (SGX Group) has launched a new initiative to identify green, social and sustainability fixed income securities that meet recognised standards.

The SGX Sustainable Fixed Income initiative allows investors to more easily identify investments that meet certain criteria at issuance. These criteria are:

• Alignment with recognised green, social or sustainability standards for fixed income securities. The list of recognised standards is set out here.
• Confirmation by an external reviewer that the fixed income securities are aligned to the recognised standards. The reviewer must be a reputable firm with an established track record of providing similar reviews; and
• Publicly published reports setting 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 under the SGX Sustainable Fixed Income initiative, issuers must publish any post-issuance reports such as the annual report, as required under the applicable recognised standard, as well as information on any material developments which may affect alignment with the recognised standards. Such reports and information must be made publicly available. Information on fixed income securities recognised under the SGX Sustainable Fixed Income initiative is published on the SGX Group website and on Marketnode.

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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. 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,” said Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo).

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. SGX RegCo will review both applications concurrently.

“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,” said Lee Beng Hong, Head of Fixed Income, Commodities & Currencies, SGX Group.

SGX RegCo estimates some 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.