Singapore Exchange (SGX) unveiled a new program designed to help investors locate green, social, and sustainable fixed-income instruments. Under the new initiative, issuers of sustainable bonds will be eligible to use an "SGX Sustainable Fixed Income mark" for securities that meet certain criteria, such as disclosure and standard alignment.
The move comes at a time when designated sustainable bonds have taken a large piece of the fixed-income market, with worldwide issuance reaching a record 16% of bond volumes in the most recent quarter and staying more resilient than the general market. Commenting on the new effort, Tan Boon Gin, CEO of Singapore Exchange Regulation, stated, "sustainable investment is gaining traction, and SGX Group hopes that such an assurance would be advantageous for other asset classes."
"The SGX Sustainable Fixed Income initiative makes it simple for investors to find fixed-income securities issued for sustainable projects that fulfil market requirements. Investors will benefit from the knowledge that these bonds have been independently examined for conformity with acknowledged standards."
To be recognized under the SGX Sustainable Fixed Income initiative, issuers will be required to meet a series of criteria, including ensuring that the securities comply with recognized green, social, or sustainability standards, obtaining confirmation from a reputable external reviewer that the securities comply with the standards, and providing published reports describing the securities' compliance.
To maintain recognition, issuers must disclose post-issuance reports as required by the standards, as well as any important information that could affect alignment with the standards.
SGX estimates that 200 SGX-listed fixed-income instruments already meet the criteria for SGX Sustainable Fixed Income.
SGX Group's Head of Fixed Income, Commodities, & Currencies, Lee Beng Hong, stated:
This distinction will help SGX Sustainable Fixed Income products stand out among the over 6,000 bonds that are listed on SGX at any given moment. "Issuers can utilize the recognition to demonstrate their commitment to these well-recognized standards and increase their visibility and profile among investors interested in sustainable fixed income securities."