1. Rule 210(5)(a) provides that a director who has no prior experience as a director of an issuer listed on the Exchange (a "First-time Director") must undergo training in the roles and responsibilities of a director of a listed issuer as prescribed by the Exchange.
2. This Practice Note prescribes the training that a First-time Director must undergo within one year from the date of his appointment to the board ("Mandatory Training"). If any director of an issuer which is newly listed on the Exchange has not attended any training as prescribed in paragraph 2 below, such director must attend Mandatory Training by the end of the first year of the issuer's listing.

1. To fulfil the Mandatory Training requirements, First-time Directors must attend one of the training programmes conducted by a training provider as specified in Schedule 1 to this Practice Note.
2. A First-time Director of a REIT manager must also attend the training programme specified in Schedule 2. A director is considered a First-time Director of a REIT manager if he or she has no prior experience as a director of a REIT manager.

1. The Exchange expects all First-time Directors to attend Mandatory Training.
2. In exceptional circumstances, First-time Directors assessed by the issuer's Nominating Committee to possess relevant experience need not attend Mandatory Training. In assessing the relevant experience, the Nominating Committee must have regard to whether the experience is comparable to the experience of a person who has served as a director of an issuer listed on the Exchange. The issuer's Nominating Committee must disclose its reasons for its assessment that the First-time Director possesses relevant experience. Such reasons shall be disclosed in the announcement of the appointment of the First-time Director as director of the issuer or in the prospectus, offering memorandum or introductory document.
3. Notwithstanding paragraph 3.2 above, the Exchange has the discretion to direct a First-time Director to attend Mandatory Training.

1. This Practice Note provides guidance in connection with profit forecasts and right of first refusal arrangements for real estate investment trusts (REITs) and business trusts (the "Trusts").

1. Listing Rule 409(3) states that the annual accounts of the investment fund for each of the last 3 financial years, if applicable must be submitted when applying for a listing. In the event the investment fund is unable to provide the annual accounts for each of the last 3 financial years, the investment fund is expected to provide profit estimates, forecasts and/or projections.
2. Listing Rule 609(b) further states that the proforma income statement or statement of comprehensive income should be presented for the latest 3 financial years and for the most recent interim period (if applicable) as if the restructured group had been in existence at the beginning of the period reported on. The proforma statement of financial position should be presented as at the date to which the most recent proforma income statement or statement of comprehensive income has been made up. In the event the issuer is unable to present the required proforma financial information, the Exchange may request for the provision of profit estimates, forecasts and projections.
3. As a guide, the Exchange will normally expect up to 2 years of full year profit estimates, forecasts or projections to be provided in relation to Rule 409(3) and Rule 609(b).

1. For any disposal of assets owned by the controlling unitholder and/or any of its subsidiaries that would fall within the investment mandate ("the competing assets"), a ROFR granted by the controlling unitholder to the Manager of the Trust will effectively mitigate conflicts of interest when the ROFR:—
   1. gives the Trust the first right to acquire the competing assets from the controlling unitholder and/or any of its subsidiaries; and
   2. is valid for as long as (i) the Manager remains the manager of the Trust; and (ii) the controlling unitholder together with its related corporations, remains a controlling shareholder of the Manager,
   
   where "related corporation" has the meaning ascribed to it under the Companies Act.
   
   In lieu of the grant of ROFR by the controlling unitholder and/or any of its subsidiaries, the issue manager and Manager of the Trust must demonstrate how alternative measures in place will effectively mitigate conflicts of interest for disposal of competing assets.

1. This Practice Note provides guidance on the continuing obligations of issuers in respect of Listing Rule 703 on the disclosure of material information and Appendix 7.1 on the Exchange's Corporate Disclosure Policy. Issuers should apply the principles outlined in the Practice Note flexibly and sensibly. Issuers are still obliged to make their own judgments when determining whether a particular piece of information is material and requires disclosure. The purpose of timely disclosure of material information is to allow the operation of a fair, orderly and transparent market. The following discussion should be read in that light.
2. In case of doubt, issuers are encouraged to consult the Exchange with respect to the application of the rules.

1. The Exchange's continuous disclosure rules are given statutory backing under Section 203 of the SFA. A breach of the Exchange's continuous disclosure obligations may be considered an offence under the SFA and may have serious legal consequences for the issuer and its officers.

1. Rule 703(1) requires an issuer to announce any information known to the issuer concerning it or any of its subsidiaries or associated companies which:
   1. is necessary to avoid the establishment of a false market in the issuer's securities (Rule 703(1)(a)). Appendix 7.1 explains that a false market may exist if information is not made available that would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell the securities. Such information may be referred to as “trade-sensitive” information; or
   2. would be likely to materially affect the price or value of the issuer's securities (Rule 703(1)(b)). Information would be likely to have such material price impact if it is likely to prompt a significant change in the price or value of the issuer's securities. Such information may be referred to as “materially price-sensitive” information.
2. Information is considered material and required to be disclosed under Rule 703(1) as long as it is either trade-sensitive or materially price-sensitive. Issuers must exercise judgment when deciding whether information is material using both these tests. If an issuer is unable to ascertain whether the information is material, the recommended course of action is to announce the information via SGXNET.
   
   Materially price-sensitive information
3. The test of whether information is materially price-sensitive is an objective one. Issuers must assess, on an ex-ante basis, if the information is likely to have a material impact to the price of its securities. It requires issuers to foresee how investors will react to any particular information when it is disclosed.
4. Issuers' assessment should consider the significance of the information in the context of the issuer's business. Information that might be immaterial to another entity may be material to the issuer, as the impact to the issuer would depend on its business and market expectations of the issuer's performance. Issuers should therefore rely on experience and knowledge of past market impact of similar type of disclosures made under comparable circumstances to form their assessment.
5. Issuers should also consider prevailing market conditions in their assessment of price impact. Factors to be considered could include liquidity of the issuer's securities, macroeconomic or sector-specific factors and the general market sentiment. Information that might be considered immaterial during stable macroeconomic and industry conditions but could become material when the industry is undergoing extreme volatility or a protracted downcycle.
6. For the purposes of assessing if a breach of Rule 703(1)(b) has occurred, the Exchange will examine actual market reaction to the information when it is disclosed. If information that is disclosed does not result in a significant change in price of the securities, then it is likely that the information may not be considered to be materially price-sensitive. The Exchange may examine market reaction over a length of time suitable for the liquidity of the securities. For example, if the securities are not actively traded, it may be necessary to look at a longer period of activity.
   
   Trade-sensitive information
7. The test for trade-sensitive information does not focus on the potential price impact of information, but rather the likelihood that the omission or failure to disclose such information will result in the market trading on an uninformed basis. Such information must be disclosed to avoid the establishment of a false market in the securities. As set out in the Corporate Disclosure Policy in Appendix 7.1, a false market may exist if information is not made available that would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell the securities.
8. The test of whether information is trade-sensitive is also an objective one. The question to ask is, is the information expected to influence an investor who commonly invests in securities to subscribe for, or buy or sell the issuer's securities in reliance of that information, if it had been known beforehand? If so, the information is trade-sensitive.
9. The term “persons who commonly invest” is defined in Section 214 of the SFA. MAS has also issued guidelines on the interpretation of the term, which set out that the class of investors that are considered “persons who commonly invest” will be product-specific, and will include retail investors for listed shares. The Exchange will employ the same definition and interpretation for the purposes of the Listing Rules.
10. For practical purposes, information which is materially price-sensitive would likely also be trade-sensitive. If information has a material price impact, it would also influence investors in their investment decisions. However, trade-sensitive information need not necessarily have a material price impact. For example, information on a transaction may have a neutral effect on share price, but may be considered to be trade-sensitive if the transaction is material to the issuer and likely to influence investors' decision to invest in the securities.
11. Therefore, the Exchange's assessment of whether information is trade-sensitive is broader than that for materially price-sensitive information. The test for trade-sensitive information assesses the likelihood that the information, if undisclosed, will cause investors to trade on an uninformed basis. In that regard, the Exchange may consider information to be trade-sensitive, even if there is no significant market reaction to the information when disclosed.
12. Issuers should make their own judgment on whether information would be trade-sensitive. In particular, an issuer should consider whether a person who commonly invests in that security would likely trade in the security in reliance of that piece of information. As with the test for materially price-sensitive information, which requires issuers to assess the impact of the information to the price of the issuer's securities, issuers should review the information in the context of the issuer's business as well as prevailing market conditions in making their assessment.

1. Rule 703(3) allows exception from disclosure provided that three conditions are met. These conditions are that (a) a reasonable person would not expect information to be disclosed, (b) the information is confidential and (c) the information either (i) concerns an incomplete proposal or negotiation, (ii) comprises matters of supposition or is insufficiently definite to warrant disclosure, (iii) is generated for internal management purposes, or (iv) is a trade secret. Information should be disclosed if any one of the three conditions is not satisfied.
   
   Confidential information
2. Where material, non-public information has been reported but not released via SGXNET, the Exchange will require clarification from an issuer to ensure that the market is trading on accurate information. If information has been reported in a reasonably specific manner or from a reliable identified source, the Exchange is likely to consider that the information is no longer confidential. For example, should the report contain the salient terms of a contract or the information has been attributed to the issuer or a reliable source, this indicates that there may have been a leakage of material information. Leakage of material information would result in a loss of confidentiality and thus an issuer can no longer rely on the confidentiality exemption under Rule 703(3).
3. An issuer is required to announce any material, non-public information that has leaked to the market even though it was covered by the exemptions in Rule 703(3) (for example, regardless of whether the transaction is still undergoing negotiation). This is regardless of the issuer's original intentions to keep the information confidential. It is therefore important for issuers to put in place strong safeguards to preserve confidentiality of its information. If the issuer is not ready to confirm the information that was leaked or there is too much uncertainty (for example, if the transaction is undergoing negotiation), the issuer should release a holding statement to sufficiently explain its position.
4. If an issuer is of the view that there has been no leak, but there is unusual market activity that could be attributable to the report, the issuer should release a statement to provide clarity on the actual situation and deny or confirm the matters in the report, even if the statement may be a reiteration of information previously announced. Where there are no media reports, but unusual market activity is observed, the issuer should undertake a review to seek the causes of the unusual market activity and take appropriate action as set out in paragraph 20 of Appendix 7.1. The issuer should also respond promptly to any queries made by the Exchange concerning the unusual trading activity. Failing which, the Exchange may suspend the issuer's securities from trading.
    

   Positive example:
   
   The Exchange issued a query to an issuer due to unusual market activity observed on the issuer's securities.
   
   The issuer requested a trading halt on the same day, and responded that it had received a non-binding proposal from a third party who had expressed interest to purchase certain businesses of the issuer and was currently in discussions with the third party. The issuer also clarified that as at the date of the announcement, no binding offer has been made and no definitive agreements have been entered into in relation to any merger and acquisition, joint venture or strategic alliance opportunity.
   
   Upon the subsequent confirmation of the transaction, the issuer followed up with another announcement that it had entered into a conditional share purchase agreement for the sale of a certain part of its business to a third party.

5. An issuer must not agree to a confidentiality clause with any other parties, for example as part of contractual terms, which may result in it not being able to comply with the continuous disclosure rules in the Listing Manual. If the test for disclosure under Rule 703 is otherwise met (for example, the entering into of a material agreement), the Exchange will expect the information to be disclosed notwithstanding that the information is confidential or that the issuer has signed a non-disclosure agreement. This requirement does not apply if Rule 703(2) applies.
   
   Rumours or speculation
6. The Exchange generally does not expect issuers to respond to rumours or speculation (including reports predicting future sales, earnings or other data) unless there is a price or volume movement in the market. However, an issuer is expected to clarify the position if the information contained in the report or rumour is reasonably specific to suggest that the information came from an insider or a reliable source. For example, if there are media reports setting out material allegations involving an issuer or its business, its Board or its management, the issuer should, where necessary, request a trading halt and promptly release an announcement to clarify its position.
   
   Information concerns an incomplete proposal or negotiation
7. Information that concerns an incomplete proposal or negotiation is excluded on the basis that the likelihood of such agreements proceeding is low or uncertain. Issuers cannot rely on this exception for material developments or arrangements where commitments to or from the issuer have already been made, even if there are expected to be subsequent developments that may change the potential impact.
8. For example, if a material transaction is subject to conditions precedent, the issuer must make prompt disclosure when commitment to undertake the transaction is made, even if the conditions precedent have yet to be satisfied. If and when there is subsequent development, issuers should then provide further updates to the market.
9. As another example, the service or receipt of a letter of demand or the commencement of a lawsuit may require disclosure if the amount or action claimed otherwise has a material impact, notwithstanding that negotiations on the letter of demand may be ongoing or the outcome of the lawsuit is not yet known. This is particularly so if the claim may, so long as it succeeds in part, materially impact the issuer's performance, even if the exact quantum of the claim may still be uncertain. However, if the claim or action could reasonably be characterised as bound to fail (for example, if the issuer has received legal advice to that effect), disclosure may not be necessary.
    

   Negative example:
   
   An issuer received a letter of demand from its lender. The amount owed by the issuer to the lender was substantial. The issuer did not immediately announce the receipt of the letter of demand, nor did it request a trading halt. The issuer said that it was still in negotiations with the lender to seek a time extension to make repayment and hence did not think that disclosure was necessary.
   
   The Exchange determined that the receipt of the letter of demand was material and took disciplinary action against the issuer for failure to disclose the matter promptly. The Exchange considered that the receipt of a letter of demand by the issuer from its lender would be considered material information for the issuer, given the amount owed. The fact that a time extension was being sought should not have altered the decision to disclose immediately, as there was already certainty of the claim. The issuer should have announced the receipt of the letter of demand promptly.

   Trade secrets
10. An issuer also cannot rely on reasons, such as possible erosion of the issuer's competitiveness or unfavourable impact on the issuer's business to avoid complying with the disclosure rules, unless the matter is a trade secret. Trade secrets are intellectual property of the issuer, such as a specific process, system or know-how belonging to the issuer which provides it with a competitive advantage. It does not include general information that can be easily discoverable or observed.

1. Examples of the types of information that could be material are provided under paragraphs 4 and 8 of Appendix 7.1. However, no definitive list can be given. What may be considered material to one issuer may not be material to another. Hence each issuer must exercise its own judgment when deciding whether information is material. Apart from considering quantitative factors, an issuer should consider qualitative and circumstantial factors when deciding whether it is necessary to disclose a particular piece of information. These include trading history of the issuer, unexplained change in price or volume of the issuer's shares, volatility of the issuer's shares, operating environment of the issuer, and the total mix of information that is publicly available. As a guiding principle, an issuer should always consider whether a reasonable person would expect the information to be disclosed.
   
   Change in the issuer's near-term earnings prospects
2. During the course of preparing its financial reports, an issuer may become aware that the company's financial position will significantly deviate from previously reported results. In such a situation, the issuer should disclose the significant deviation immediately, and not withhold it until the scheduled release of the financial report. This is made clear in paragraph 8 of Appendix 7.1, which states that where there is firm evidence of significant improvement or deterioration in the near-term earnings prospects, this is likely to be considered material information which must be disclosed immediately. The same obligation also applies if there are material adjustments to the issuer's previously announced financial statements.
3. Issuers should take into account the information currently available to the public that might inform investors' expectations on the issuer's future performance. This will necessarily include previous prospect statements made by the issuer in its financial reports.
4. Apart from the financial reporting cycle, an issuer may also become aware of material changes to its near-term earnings prospects caused by general trading trends or by specific events or developments during the course of its business which may be likely to materially affect its earnings (for example, a loss of a major customer or disruption to a major supplier). The issuer should assess if such events or developments are material and require immediate disclosure. The issuer should put in place internal controls to escalate material information to the Board expediently for consideration.
   
   Ongoing developments
5. In certain situations, a matter may still be developing or undergoing further assessment, and issuers may not be able to quantify the impact at the occurrence of the material event. Issuers must still make disclosure of the event without delay. Their announcement should contain sufficient information for investors to understand the potential magnitude of the event and its relevance in the context of the issuer's prospects. Useful information will include a description of the risks or uncertainties and mitigating measures to be taken by the issuer. Issuers should follow up with further announcements to the market when there are subsequent material developments.

   Positive example:
   
   A fire occurred at a storage facility of a major supplier of an issuer. The issuer made immediate announcement of the incident on SGXNET, while it was still in the process of assessing the scale of the impact.
   
   In its announcement, the issuer included information on the extent of its reliance on that particular supplier, the immediate impact of the fire to its supply operations and obligations to existing customers, as well as mitigating measures undertaken to minimise impact of the disruption.
   
   The issuer also stated that it was conducting further assessment of the impact, and would provide updates to the market if it is concluded that there is material impact.

   Investigation on a director or an executive officer of the issuer
6. Under Rule 704(7)(a), an announcement of the appointment of key persons by an issuer must contain material background information as set out in Appendix 7.4.1. Such information includes, among others, whether the key person has been concerned with the management or conduct of the affairs of any corporation or entity which has been investigated, or the subject of civil or criminal proceedings (including pending proceedings), in each case, involving a breach of law or regulatory requirement as set out in Appendix 7.4.1 relating to the securities or futures industry, or involving fraud or dishonesty.
7. Under Rule 720(1), an issuer must also comply with Rule 210(5) on a continuing basis, which requires, among others, a consideration of the character and integrity of directors and management.
8. Issuers should put in place internal controls to ensure that where directors or executive officers are notified by a regulatory authority, an exchange, a professional body or a government agency (“relevant authority”), that they are to be interviewed or under investigation, such information is escalated expediently to the Board, including the Nominating Committee. The Board should conduct an independent assessment of the matter and not rely solely on the representations made by the director or executive officer. Where investigations are on-going, directors and executive officers must continue to provide updates to the Board on material development relating to the investigations, including the conclusion of investigations, so long as they are not prohibited from doing so by the regulatory requirements.
9. In determining whether the information is material for disclosure, the Board should consider, among others:
   1. whether the information is material to the affairs of the issuer, taking into account factors such as:
      1. the extent to which the interview or investigation concerns the affairs of the issuer or the group;
      2. the extent to which the issuer is reliant on the director or executive officer for the proper oversight and management of the issuer; and
      3. the extent to which the director's or executive officer's ability to oversee or manage the issuer is compromised; and
   2. whether the investigation would affect the information previously disclosed in accordance with Rule 704(7)(a) or the assessment of the character and integrity of the director or executive officer; and
   3. the severity of the potential breach.
10. Subject to paragraph 5.9 above, the following events are likely to require immediate disclosure:
    1. the director or executive officer has been served with an order for the production of documents to assist in an investigation in relation to a breach of law, rule or regulation;
    2. the director or executive officer was investigated and interviewed by the relevant authority;
    3. the director or executive officer has surrendered his passport to a relevant authority, has been arrested (with or without posting bail) by a relevant authority, has been formally charged by a relevant authority or a relevant authority has imposed conditions or restrictions on the director or executive officer; or
    4. the director or executive officer has been convicted or disqualified or is the subject of any judgement or ruling.
11. To give clarity to such events, an announcement made pursuant to paragraph 5.10 above should contain:
    1. the name and position of the relevant director or executive officer;
    2. the relevant fact (for example, that the director has surrendered his passport to the relevant authority) and details of any other conditions or restrictions imposed by the relevant authority, where applicable;
    3. the alleged offences and the identity of the offender whom the authorities were investigating as stated in the order, where applicable;
    4. the Nominating Committee’s assessment of the suitability of the continued appointment of the director or executive officer and continued compliance with Rule 720(1) (read with Rule 210(5)) as well as the measures (if any) put in place to safeguard against risks associated with his continued appointment, where applicable;
    5. a statement by the director or executive officer that he undertakes to inform the Board of the ongoing investigation and subsequent developments; and
    6. the Board’s statement that it will continue to monitor the progress of the investigation and the Nominating Committee will continue to re-assess the suitability of the continued appointment of the relevant director or executive officer as and when there are material developments to the investigation. If no measures to safeguard against risks associated with the retention of such individual are considered necessary by the Board, this should be stated in the announcement, along with the reasons.
12. Where a person is a director or executive officer in multiple listed issuers, the onus is on the person to notify the Boards of all these listed issuers of his involvement in an ongoing investigation. Where an issuer has been notified by its director or executive officer of his involvement in an ongoing investigation that does not directly concern the affairs of the issuer, the Nominating Committee must still assess the suitability of the continued appointment of the relevant director or executive officer. For instance, the Nominating Committee must assess whether the investigation is material to the issuer, and whether the investigation would affect the assessment of the character and integrity of the director or executive officer. Where the Nominating Committee opines that the investigation is material to the issuer or has a bearing on the character and integrity of the director or executive officer, the issuer must announce the Nominating Committee’s assessment of the suitability of the continued appointment of the relevant director or executive officer and continued compliance with Rule 720(1) (read with Rule 210(5)) as well as the measures (if any) put in place to safeguard against the risks associated with his continued appointment. If no measures are considered necessary by the Board, this should be stated in the announcement, along with the reasons.
13. Where the Nominating Committee finds that it is not in the best interest of the Company for the relevant director or executive officer to continue with his current appointment, an announcement should be made on the suspension or cessation of service pursuant to Rule 704(7)(a) and the reason for the suspension or cessation.
14. On the other hand, where a relevant conduct has resulted in a private sanction by the relevant authority, such information need not be disclosed as the breach is likely to be of a less serious nature and the relevant authority has deemed it appropriate for the sanction to remain confidential.
    
    Investigation on an issuer
15. In the case where the issuer itself is involved in an investigation, the market should similarly be updated in a timely manner. In determining whether the information is material for disclosure, the Board should consider, among others:
    1. whether the information is material to the affairs of the issuer; and
    2. the severity of the potential breach.
16. Subject to paragraph 5.15 above, the following events are likely to require immediate disclosure:
    1. the issuer has been contacted by a relevant authority or served with an order for the production of documents to assist in an investigation in relation to a breach of law, rule or regulation; or
    2. the issuer has been informed or becomes aware that any of its subsidiaries or associated companies are under investigation by a relevant authority.
17. To give clarity to such events, an announcement made pursuant to paragraph 5.15 above should contain:
    1. the name of the relevant subsidiary or associated company, where applicable;
    2. the relevant fact and details of any other conditions or restrictions imposed by the relevant authority, where applicable;
    3. the alleged offences and identity of the offender whom the authorities was investigating as stated in the order, where applicable; and
    4. the Board’s statement that it will continue to monitor the progress of the investigation and to provide updates on material developments.

Publication of promotional material

1. Announcements on SGXNET must be balanced and fair. That is, both the positive and negative aspects of the development or prospects must be disclosed honestly and without bias. Issuers should be cautious not to mislead investors with the presentation or emphasis of certain favourable information, or omission of certain unfavourable key facts.
2. In particular, paragraph 25 of Appendix 7.1 states that issuers should avoid the use of promotional jargon in their announcements. This does not mean that issuers should avoid disclosing developments or presenting forward looking information that are positive in nature. For example, a property development company may announce updates of its key projects attaining certain sales milestones; a technology company may announce the launch of a breakthrough product. Such announcements enable investors to assess the impact of such developments on the issuer's business and future prospects. In this regard, issuers should refer to the specific guidance provided in Appendix 7.1, to ensure that their disclosures meet the requirements of being balanced and fair.
3. Issuers should also avoid using SGXNET to publish third party research reports that present a favourable valuation of the issuer's shares, with the aim of driving up the share price. The publication of research reports by an issuer could be interpreted as tacit representation that its results will be close to the estimate and will likely be considered by the Exchange as a prospect statement. The report will also be subject to the same requirements as any other announcement from the issuer (for example, it must not mislead investors and must be presented in a balanced and fair manner). In addition, as stated in paragraph 11 of Appendix 7.1, estimates or projections should be prepared carefully, be soundly based and should be realistic.

   Negative example:
   
   An issuer announced a third party research analyst's projected valuation of the issuer's securities. Upon investigation, the Exchange found that the issuer had omitted key facts from the research report in its announcement. In particular, the issuer only presented the most optimistic scenario of the analyst's valuation in the announcement, without sufficient qualification or explanation. The issuer had failed to highlight the range of possible valuation scenarios and key assumptions for each scenario that had been included in the research report.
   
   The Exchange took the view that the issuer was in breach of the Listing Rule requirements for announcements to be balanced and fair and took disciplinary action against the issuer.

   Sufficient information
4. Announcements should contain sufficient detail to allow investors to evaluate the relative importance of the announced information to the issuer. When announcing the award of any contract or new business arrangements, for example distributorships, joint ventures and strategic alliances, an issuer must state clearly the financial impact arising from the transaction or, if there is no material impact, provide a statement to that effect. By providing the financial impact on the issuer, investors will be able to put the announcement in perspective.
5. The Exchange recognises that there may be some instances where an issuer is prevented from disclosing the financial impact with certainty. One example may be the existence of certain variables that are outside the issuer's control, such as fulfillment of a contract on an ad-hoc basis or poor visibility as to when revenue is generated. Under these circumstances, the issuer should provide an explanation for the non-disclosure and sufficient information to enable investors to independently assess the financial impact taking into consideration the variables disclosed.
6. The inclusion of generic or boilerplate statements is of limited use to investors. For example, vague statements such as “the issuer expects to remain profitable” or imprecise terms such as “double digit performance” do not provide useful information to investors as to the possible scale of performance expected. As another example, if a transaction will only be conducted in the next financial year, a statement merely stating that the transaction is not expected to have a material impact for the current financial year will not be meaningful. In this regard, issuers should set out the specific facts or circumstances that has affected or may affect performance, and provide insightful analysis on the impact for investors to make an informed assessment of the issuer's prospects.

Information from third parties

1. Announcements by third parties, such as industry regulators, may be considered material information. If the issuer assesses that there is material impact from these developments, it should make the necessary disclosure, with an assessment impact of the event.
2. There may be instances where a third party releases information on behalf of, or relevant to, an issuer, for example in the case of a takeover. Where possible, issuers should ensure that the announcement provided by the third parties is made under the issuer's name, so that investors can locate all announcements relating to an issuer when they access SGXNET. Third parties and professional advisers who do not represent the issuer are also encouraged to liaise with the issuer and make necessary arrangements to release any material announcement pertaining to the issuer under the issuer's name.
   
   Publication on the issuer's website
3. The Exchange does not prohibit issuers from disseminating information through other media such as the Internet. Issuers are reminded that any material information released on the Internet, including posting of information on its own website, should have been previously released via SGXNET, or should be simultaneously released via SGXNET.
   
   Analyst briefings
4. The Exchange does not prohibit issuers from conducting briefings with analysts and holding meetings with groups of investors and the media. However, such meetings might create a perception that analysts, institutional investors, fund managers or media have access to information that is not generally available to the public and this may undermine investors' confidence in the existence of a level playing field. Hence, an issuer should have in place policies to minimise the risk of being perceived to be practising selective disclosure. Such policies might include pre-release of any prepared information intended for the briefings and meetings, for example slides or speeches, via SGXNET. Alternatively, as such information must not be material, non-public information, it could be released on the issuer's website with an accompanying SGXNET announcement to inform investors that additional information is available on the issuer's website. The second alternative may be preferred if the issuer intends to release large-sized files or provide a webcast of the briefing.
5. Where an issuer inadvertently discloses material, non-public information during these briefings or meetings, the issuer must disseminate the information via SGXNET as promptly as possible. An issuer may, if necessary, request a trading halt in its securities.
   
   Response to queries from the Exchange
6. The Exchange may suspend the trading of an issuer's securities if an issuer fails to respond to a query issued by the Exchange before the commencement of trading or where there is unusual market activity upon commencement of trading. The issuance of a holding announcement by the issuer stating that the Exchange is querying the issuer is not acceptable, as the investing public would still be trading on an uninformed basis. Issuers may request a trading halt to facilitate the release of announcements.

1. Listing Rule 711A requires every issuer to prepare an annual sustainability report, which must describe the issuer's sustainability practices with reference to the primary components set out in Listing Rule 711B on a 'comply or explain' basis (other than as required under Listing Rule 711B(2)). This Practice Note contains the Sustainability Reporting Guide (the "Guide"), which provides guidance on the expected structure and contents and the preparation of the sustainability report.
2. Sustainability reporting disclosure does not detract from the issuer's obligation to disclose any information that is necessary to avoid the establishment of a false market in the issuer's securities or would be likely to materially affect the price or value of its securities pursuant to Listing Rule 703.
3. A glossary of the common terms used in the Guide is set out in paragraph 8 of this Guide.

1. Issuers make regular financial reports to their investors that are used for assessment of the likelihood of repayment and the returns on investment.
2. The addition of sustainability reporting to financial reporting provides a more comprehensive picture of the issuer: statements of financial position and comprehensive income provide a snapshot of the present and an account of the past year, while sustainability reports of environmental, social and governance (“ESG”) factors show the risks and opportunities within sight, managed for future returns. Taken together, the combined financial and sustainability reports enable a better assessment of the issuer's financial prospects, the sustainability of the current business into the future and quality of management.
3. To achieve the additional transparency which encourages efficiency and innovation, SGX-ST requires each issuer to publish an annual sustainability report. This Guide provides guidance to the issuer on compliance with the requirements under the Listing Rules.

1. The Code states as its preamble that sustainability, together with accountability and transparency, is a tenet of good governance. It provides that the Board is collectively responsible for the long-term success of the issuer, and the Board's role includes setting strategic objectives which should include appropriate focus on sustainability. The Board has ultimate responsibility for the issuer's sustainability reporting. Consistent with its role, the Board should determine the ESG factors identified as material to the business and see to it that they are monitored and managed. Management has responsibility to ensure that the ESG factors are monitored on an ongoing basis and properly managed. The Board's close interaction with management will enable the Board to satisfy itself on the way sustainability governance is structured and functioning through the various levels of management. If any question is raised regarding the issuer's sustainability reporting, the Board and management should make sure it is addressed.

   'Comply or explain'

2. Each issuer is required to prepare an annual sustainability report. The sustainability report must include the primary components as set out in Listing Rule 711B on a 'comply or explain' basis (other than as required under Listing Rule 711B(2)). Where the issuer cannot report on any primary component, the issuer must state so and explain what it does instead and the reasons for doing so. As set out in Listing Rule 711B(2), an issuer must not exclude the primary component in Listing Rule 711B(1)(aa).

   Report risks as well as opportunities

3. In identifying material ESG factors, the issuer should consider both risks and opportunities. In addition, it is conceptually sound, and validated by experience, that risks well-managed represent strengths which can be applied to fulfill opportunities. The risks and opportunities within sight have direct bearing on strategies and operations and should be reported for clearer understanding of the issuer's performance, prospects and management quality. To facilitate understanding, issuers should give the whole explanation in a concise manner.

   Balanced reporting

4. In reporting on sustainability, care should be taken to give a neutral and accurate view. There may be a tendency to give more prominence to what is favourable and understate what is negative. Both situations require comprehensive explanations. In reporting performance, factors beyond the issuer's control are as relevant to exceeding the target as to a performance shortfall. In the event of underperformance, the issuer's response is also important and should be included to bring about confidence in its longer term sustainability objectives.

   Stakeholder engagement

5. The issuer's responsibility on disclosure, including annual reports and sustainability reports, is first and foremost to current and potential shareholders, i.e. the investing public. Interaction of the issuer with its other stakeholders is also of interest to investors for its relevance to sustainability across the value chain of the issuer. The views of stakeholders also contribute to inform the issuer's identification of material ESG factors. On a continuing basis, regular and sustained engagement with stakeholders provides the issuer with an up-to-date picture of its sustainability within both its business and physical environments. The material outcomes of such engagement should be included in the sustainability report.

1. The sustainability report should comprise the following primary components:

   1. Material ESG factors. The sustainability report should identify the material ESG factors, and describe both the reasons for and the process of selection, taking into consideration their relevance or impact to the business, strategy, financial planning, business model and key stakeholders.
   2. Climate-related disclosures. The sustainability report should contain disclosures related to climate-related risks and opportunities.
   3. Policies, practices and performance. The sustainability report should set out the issuer's policies, practices and performance in relation to the material ESG factors identified, providing descriptive and quantitative information on each of the identified material ESG factors for the reporting period. Performance should be described in the context of previously disclosed targets.
   4. Targets. The sustainability report should set out the issuer's targets for the forthcoming year in relation to each material ESG factor identified. Targets should be considered for defined short, medium and long term horizons, and if not consistent with those used for strategic planning and financial reporting, the reasons for the inconsistency should be disclosed.
   5. Sustainability reporting framework. The issuer should select a sustainability reporting framework (or frameworks) to guide its reporting and disclosure. For climate-related disclosures, the issuer should refer to paragraphs 4.7 to 4.28 of this Guide. The sustainability reporting framework(s) selected should be appropriate for and suited to its industry and business model. The issuer should state the name of the framework(s), explain its reasons for choosing the framework(s) and provide a general description of the extent of the issuer's application of the framework(s). Where the issuer is applying a portion of a particular framework, the issuer should provide a general description of the extent of the issuer's application of the framework.
   6. Board statement. The sustainability report should contain a statement of the Board that it has considered sustainability issues in the issuer’s business and strategy, determined the material ESG factors and overseen the management and monitoring of the material ESG factors. In addition, the sustainability report should describe the roles of the Board and the management in the governance of sustainability issues.

   Identification of material ESG factors

2. The issuer should review its business in the context of the value chain and determine what ESG factors in relation to its interaction with its physical environment and social community and its governance, are material for the continuity of its business. The issuer is expected to report the criteria and process by which it has made its selection with reference to how these factors contribute to the creation of value for the issuer.
3. In broad terms, environmental factors would include materials, energy, biodiversity, water, greenhouse gas (“GHG”) emissions, effluents and waste as well as environmental complaint mechanisms. Social factors would include health and safety, employment practices and labour rights such as collective bargaining, product responsibility, anti-corruption, supplier assessments and impact of direct and supply chain activities on local communities. The framework chosen is likely to have additional factors that the issuer would report on.
4. Corruption is a factor on which many investors require reassurance, whether inducement is being offered to employees or by employees to others. Where corruption has been addressed in the Corporate Governance report, the issuer may refer to that report. If corruption is not assessed to be a material ESG factor by the issuer, where stakeholders express sufficient interest in the information, the issuer is advised to state its policy and safeguards on its website.
5. Gender, skills and experience have been highlighted as diversity indicators material to business sustainability. Diversity greatly enhances the issuer's capacity for breadth of input and perspectives into decision making, risk alertness and responsiveness to change. The issuer should be aware of this trend and assess whether diversity is a material social factor in its business. It should engage stakeholders in assessing the necessity of reporting on this matter. In satisfying investors and other stakeholders, diversity should be examined through broad levels of staff and also importantly, in the Board. Where other sections of the annual report sufficiently address stakeholders’ interest in diversity, the issuer may refer to those sections.

6. The issuer should consider not just its internal circle of operations but also widen that circle to include persons and processes in the value chain that contribute to the issuer's product or service. Parts of the business outsourced to third parties (for example, freight and logistics), as well as downstream processes (for example, product defect response), constitute an integral part of the issuer's business and need to be included in the sustainability report.

   Climate-related disclosures

7. Climate change threatens to disrupt businesses in a precipitous and potentially devastating manner, with consequential detrimental effects on their stakeholders and providers of capital. Conversely, it also opens up new markets for solutions that respond to the threat. Investors need to properly understand the climate-related risks and opportunities of their portfolio in order to price or value their investments.
8. Securities markets promote the ready availability of decision-useful information so that it may be reflected in the price discovery process. In doing so, exchanges facilitate the allocation of capital to its most efficient use and the transfer of risks to those most willing to bear them.
9. The IFRS Sustainability Disclosure Standards build on the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”). It aims to be a comprehensive global framework of sustainability-related financial disclosures to meet the needs of capital markets and to serve the demand for more consistent, comparable and verifiable information about the exposure to, and management of, sustainability-related risks and opportunities. The IFRS Sustainability Disclosure Standards were developed to support a global framework of investor-focused disclosures on sustainability-related financial information and have received widespread support globally, including from the G20 and the Financial Stability Board. The International Organization of Securities Commissions has also endorsed the IFRS Sustainability Disclosure Standards in July 2023. 

   Structure of the IFRS Sustainability Disclosure Standards and baseline requirement

10. The core content of the IFRS Sustainability Disclosure Standards is structured in alignment with the four pillars of the TCFD recommendations: governance, strategy, risk management, and metrics and targets. Climate-related risks are associated with both physical risks (such as those arising from weather-related events like storms, floods or heatwaves and longer-term shifts in climatic patterns like sea level rise) and transition risks (arising from efforts to transition to a lower-carbon economy and may include policy, technological and reputational risks).
11. IFRS S1 sets out the general requirements for disclosure of sustainability-related financial information including the conceptual foundations, core content, general requirements and judgements, uncertainties and errors. IFRS S2 sets out supplementary requirements that relate specifically to climate-related risks and opportunities. 
12. The baseline requirement for issuers under the Listing Rules in respect of the disclosure of the primary component in Listing Rule 711B(1)(aa) is to disclose information on climate-related risks and opportunities that apply all the requirements in IFRS S2 (other than the disclosure of Scope 3 GHG emissions as set out in paragraph 4.23 of this Guide), and consequently apply the climate-relevant provisions in IFRS S1.
13. Therefore, in applying IFRS S1 for climate-related disclosures, an issuer should particularly refer to the conceptual foundations, general requirements, judgements and uncertainties and errors specified therein. Key concepts such as connected information, value chains, assessment of materiality and key requirements such as the reporting entity and timing and location of reporting are set out in IFRS S1. For example, materiality of information is judged in relation to whether omitting, misstating or obscuring the information could reasonably be expected to influence decisions of primary users of general purpose financial reports. 
14. IFRS S1 requires entities that report their sustainability-related financial disclosures in accordance with the IFRS Sustainability Disclosure Standards to make an explicit and unreserved statement of compliance, which may not be made unless an entity complies with all the requirements, including the requirements in IFRS S1 applicable beyond climate-related disclosures. In this regard, issuers will not be required to make such a statement of compliance. SGX RegCo permits and encourages issuers of any size to use and fully apply the IFRS Sustainability Disclosure Standards. An issuer that complies with all the requirements in IFRS S1 and IFRS S2 can, but is not mandated to, make an explicit and unreserved statement of compliance with the IFRS Sustainability Disclosure Standards; an issuer that complies with all the requirements in IFRS S2 and the climate-relevant provisions in IFRS S1 can, but is not mandated to, state that it complies with the climate-related requirements in the IFRS Sustainability Disclosure Standards. 
15. In the core content of IFRS S1, there are also specific paragraphs which will be relevant for the issuer including the elaboration of short-, medium- and long-term time horizons, trade-offs between sustainability-related risks and opportunities that an issuer considered and the objective of sustainability-related financial disclosures on risk management to enable users of general purpose financial report to assess an issuer’s overall risk profile and its overall risk management process. 

    ISSB guidance

16. The ISSB has issued application guidance, which forms an integral part of the IFRS Sustainability Disclosure Standards, on, among others, the following topics:
    1. identifying sustainability-related risks and opportunities and disclosing material information about such risks and opportunities;
    2. applying scenario analysis to assess climate resilience;
    3. measuring GHG emissions, including Scope 3 GHG emissions;
    4. disclosing information relevant to the cross-industry metric categories; and
    5. disclosing information about the climate-related targets that have been set or are required to be met by law or regulation.
17. In addition, the ISSB has also issued accompanying guidance containing illustrative guidance and illustrative examples to support companies in applying the IFRS Sustainability Disclosure Standards on, among others, the following topics:
    1. guidance on metrics that could be disclosed as part of information relevant to the cross-industry metric categories;
    2. examples of disclosing GHG emissions applying the principles in IFRS S1 for aggregation and disaggregation; and
    3. industry-based guidance on identifying appropriate disclosures about climate-related risks and opportunities that are associated with common business models and activities in a particular industry.

    Reliefs

18. The ISSB has sought to achieve a balance between the costs for companies in applying the requirements and ensuring investors are provided with consistent, comparable and verifiable information. It introduced a package of (permanent) structural reliefs and (temporary) transition reliefs in the IFRS Sustainability Disclosure Standards. 
19. As part of the (permanent) structural reliefs, an issuer is allowed to:
    1. consider its skills, capabilities and resources when determining its approach:
       1. for its climate-related scenario analysis; and
       2. in preparing disclosures about the anticipated financial effects of a climate-related risk or opportunity; and
    2. use all reasonable and supportable information that is available to the issuer at the reporting date without undue cost or effort in:
       1. identifying climate-related risks and opportunities; 
       2. preparing disclosures about the anticipated financial effects of a climate-related risk or opportunity;
       3. determining its approach, and selecting the inputs, for its climate-related scenario analysis; 
       4. determining the scope of the value chain;
       5. calculation of amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities; and
       6. measuring Scope 3 GHG emissions.
20. As part of the (temporary) transition reliefs, an issuer (including newly-listed issuers) need not do the following in the first year of reporting applying the IFRS Sustainability Disclosure Standards:
    1. provide its Scope 3 GHG emissions;
    2. use the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standards (2004) if it was previously using a different method; and
    3. provide comparative information in respect of the preceding period.

    Scope 3 GHG emissions

21.  IFRS S2 requires disclosure of Scope 3 GHG emissions, and the approach used to measure such GHG emissions. Emissions must be measured in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standards (2004), subject to the reliefs specified and to the extent that it does not conflict with the IFRS Sustainability Disclosure Standards. An issuer should consider the 15 categories of Scope 3 GHG emissions, as described in the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) (“Scope 3 Standard”), to identify which categories are applicable to the issuer. The issuer might determine that not all categories are applicable to it and therefore disclose which of these categories are included in its Scope 3 GHG emissions. For example, an issuer may not have leased assets or franchises or may be unable to estimate Scope 3 GHG emissions due to a lack of data or other limiting factors, as described in the Scope 3 Standard. 
22. The ISSB has also developed a Scope 3 measurement framework to provide additional guidance about measuring Scope 3 GHG emissions. While direct measurement and primary data is preferred, an issuer may still estimate Scope 3 GHG emissions based on assumptions and appropriate inputs and use secondary data under such framework. Primary data includes data provided by suppliers or other entities in the value chain from specific activities within an entity’s value chain, while secondary data is not directly obtained. Secondary data is typically supplied by third-party providers and includes industry-average data. 
23. Recognising that the measurement and reporting methodologies of Scope 3 GHG emissions are still evolving, SGX RegCo will carry out an in-depth review of issuers' experience and readiness in reporting Scope 3 GHG emissions before setting out the implementation roadmap for disclosures of Scope 3 GHG emissions. In the implementation roadmap, larger issuers (e.g. issuers above a certain market capitalisation) will likely be prioritised for reporting. The intention is for larger issuers by market capitalisation to report Scope 3 GHG emissions from the financial year commencing on or after 1 January 2026. Ample notice will be given to issuers before reporting requirements come into effect. Issuers that are already reporting their Scope 3 GHG emissions are encouraged to continue to do so. Issuers that have not yet reported on Scope 3 GHG emissions are encouraged to build up their capabilities in the interim period.

    Scenario analysis

24.  IFRS S2 requires use of climate-related scenario analysis to inform an issuer’s disclosures about their resilience to climate change. IFRS S2 contains application guidance on how an issuer is required to determine the method of scenario analysis to assess its climate resilience. To reduce the risks and impacts of climate change, almost all countries have agreed to take action in limiting global warming to well below 2°C above pre-industrial levels, while pursuing efforts to arrest the increase to 1.5°C above pre-industrial levels. The issuer should describe how resilient its strategies are to climate-related risks and opportunities, taking into consideration a transition to a lower-carbon economy consistent with a 2°C or lower scenario and, where relevant, scenarios consistent with increased physical climate-related risks.
25. An issuer new to scenario analysis can consider starting with qualitative scenario narratives to explore the potential range of implications. As it gains more experience, it can consider using quantitative information to describe the potential outcomes, and to enhance the rigour of that analysis.
26. The Sustainable Stock Exchanges initiative has also developed a checklist in its model guidance on climate disclosure (“SSE Model Guidance on Climate Disclosure”). The SSE Model Guidance on Climate Disclosure sets out a simplified three stage process to the conduct of scenario analysis. First, the issuer should identify appropriate scenarios that align with its underlying assumptions and the key risks and opportunities of its sector or industry, and clearly explain the scenarios used. Second, the issuer may set boundaries of its scenario analysis with sufficient disclosure of the reasons for exclusion and inclusion. A smaller issuer may feel that an analysis of the direct operations sufficiently covers the climate-related risks and opportunities within each scenario, while a larger issuer and those in the financial sector should expand their analysis beyond their direct operations to include indirect GHG emissions (i.e. Scope 3 GHG emissions). Third, an issuer should evaluate its physical and transitional risks within the scenarios chosen. Mapping the severity and likelihood of the risks enables the issuer to develop a strategic plan for future scenarios. Additional guidance on scenario analysis as required by IFRS S2 has also been provided in the model guidance on sustainability-related financial disclosures issued by the Sustainable Stock Exchanges initiative in 2024.

    Industry-based metrics and cross-industry metrics

27. IFRS S2 requires an issuer to disclose industry-based metrics that are associated with common business models and activities in a particular industry. When an issuer provides industry-based metrics, it shall refer to and consider the relevant industry-based guidance to present fairly the climate-related risks and opportunities to which it is exposed.
28. In addition, IFRS S2 requires an issuer to disclose cross-industry metric categories including:
    1. climate-related transition risks – the amount and percentage of assets or business activities vulnerable to transition risks;
    2. climate-related physical risks – the amount and percentage of assets or business activities vulnerable to physical risks;
    3. capital deployment – the amount of capital expenditure, financing or investment deployed towards climate-related risks and opportunities; and
    4. internal carbon prices used to assess the cost of emissions.

    The industry-based guidance can assist issuers in meeting the requirements for disclosures related to cross-industry metric categories.

    Materiality

29. As guidance, sustainability reporting relates to the most important ESG risks and opportunities that will act as barriers or enablers to achieving business goals in the short, medium and long term. The omission or misstatement of these risks or opportunities could influence the decisions of investors. The sustainability reporting framework selected by the issuer may also contain a definition of materiality that the issuer should consider. For example, for climate-related disclosures, in accordance with the IFRS Sustainability Disclosure Standards, materiality of information is judged in relation to whether omitting, misstating or obscuring the information could reasonably be expected to influence decisions of primary users of general purpose financial reports. This would require consideration of the characteristics of those users and of the issuer’s own circumstances.
30. Generally, what is material in sustainability reporting would also be considered material in financial terms, if not in the immediate period, then over time.
31. In assessing materiality of the ESG factors on which it reports, the issuer should first satisfy itself of the relevance of selected factors to its business strategy and outcomes. This has the benefit of focusing both executives and employees on uniform key risks and opportunities that deliver (or impede) desired outcomes.
32. The issuer should use risk ranking and prioritisation to distil the material ESG factors. This process is similar to the widely-practised Enterprise Risk Management (“ERM”) process. The issuer should expand the breadth of the assessment to integrate ESG risk management structures into existing ERM structures or apply existing ERM structures to ESG risk management structures. Issuers may consider sustainability-related opportunities as part of business strategy. 
33. The Board should determine the material ESG factors and the issuer's response to the attendant risks and opportunities. Discussion with stakeholders contributes to an accurate appreciation of what is important in the business on an ongoing basis.

    Possible process and tools

34. A possible process for assessing ESG factors with material relevance to the business and business model are set out in the following paragraphs.
35. In assessing materiality of the ESG factors on which it reports, the issuer may consider:
    1. Value drivers
    2. Stakeholder engagement
    3. Risk management
    4. External factors, for example sector, geography, economics, market, social, environment
    5. Internal factors, for example business model, business cycle, strategy
    6. Qualitative perspectives, for example operational, strategic, reputational and regulatory
    7. Timeframe of these considerations
36. The issuer may use the following Materiality Determination Process: Identify — Rate — Prioritise — Validate. The issuer should disclose the outcomes of this process in its sustainability report.
    1. STEP 1: IDENTIFY. The issuer should identify the most pressing (material) factors (impact/opportunities) for the issuer (or for each subsidiary in the group). It will also help formulate management's approach and response, and identify where data collection needs to be strengthened.
    2. STEP 2: RATE. Once the issues of the issuer and its subsidiaries have been explored, the issuer will need to cluster similar issues e.g. safety and health issues can be clustered together. If the issuer is a holding company, a rating process can be done to assess what issues are pervasive/most common across the group.
    3. STEP 3: PRIORITISE. Once the issues of the issuer and its subsidiaries have been clustered and rated, the issuer will need to prioritise them using a matrix based on likelihood and impact.
    4. STEP 4: VALIDATE. Once the issuer has prioritised its factors, they need to be internally validated and signed off by the Board.

    Policies, practices and performance

37. The issuer should devise policies and processes to adequately and effectively manage the risks associated with the identified material ESG factors, and describe key features of mitigation.
38. A description of the ESG practices and performance across historical and the current reporting periods allows investors and the issuer itself to track its progress. These metrics also form the baseline from which the issuer chooses to set its targets, as informed by its strategic plan and financial reporting.
39. An effective policy and operational response to sustainability risks and opportunities requires performance measurement and its linkage to performance incentives. Having a good performance measurement system allows the issuer to benchmark performance against stated objectives and facilitates comparison over time and across entities. Clearly linking sustainability risks and opportunities with strategy, other organisational risks, operational indicators, performance measures and performance incentives not only enhances understanding but provides an engine for improvement, innovation and accountability.
40. A clear description of the issuer’s substantive response to ESG risks and opportunities, with a focus on its policies, practices and performance against targets, will bolster investors’ confidence in the Board and management.

    Sustainability reporting framework

41. The issuer should select a sustainability reporting framework which is appropriate for and suited to its industry and business model, and explain its choice. In doing so, the issuer should place importance on using a globally-recognised framework for its wider acceptance in an increasingly global marketplace. The issuer can be more easily understood and compared with its peers in Singapore as well as in other jurisdictions across the world. The issuer should exercise considerable caution if it chooses to deviate from generally-accepted frameworks. Where the issuer is applying a portion of a particular framework, the issuer should provide a general description of the extent of the issuer's application of the framework.
42. Among the well-known and globally-recognised sustainability reporting frameworks, the IFRS Sustainability Disclosure Standards and the Global Reporting Initiative (“GRI”) Standards set out generic sustainability factors and general principles and indicators that an issuer can use to report sustainability policies, practices, performance and targets. The SASB Standards also enables issuers to adopt an industry-specific approach to material ESG factors. The Integrated Reporting Framework (“<IR>”) also sets out a general framework for reporting. An issuer using <IR> should consider ESG factors when determining their material factors for inclusion in the integrated report. More than one sustainability reporting framework may be chosen as relevant to the issuer's business.
43. For climate-related disclosures, the issuer should refer to paragraphs 4.7 to 4.28 of this Guide. Some issuers have used the Science Based Targets initiative or other sector-specific guidance to guide their GHG emissions reduction targets.
44. The issuer is expected to follow the chosen framework(s) from year to year and build up its knowledge and understanding of how to report effectively. In turn, it can expect to be building up investors' and stakeholders' understanding, leading to increased confidence. In the absence of regulatory changes, only major changes in business strategy and/or model are likely to require change in sustainability reporting framework. This does not preclude examination of framework relevance from time to time.

    Time horizons used in the sustainability report

45. In making its sustainability report, the issuer should consider whether it would be useful to report matters for their relevance in the short, medium and long term. Accordingly, sustainability policies, practices, performance and targets would be considered along the same time horizons. The time horizons should be internally consistent with those used for strategic planning and financial reporting (e.g. useful life of assets, impairment testing etc.). Where they are not consistent, the reasons for the inconsistency should be disclosed. Typically the short-term is considered less than one year for banking and financial instruments. For the medium term, the issuer may wish to take reference from their typical planning horizon, investment cycle or plant renewal or other considerations relevant to its business. The long-term should be a useful time horizon over which expectations can be formed and efforts planned.

    Stakeholder engagement

46. Stakeholder engagement is integral to any business and would be conducted regularly. The issuer should consider ESG factors in their engagement with stakeholders, not just with investors, but also customers, staff, suppliers, regulators, local communities and others in the value chain. The issuer should monitor carefully its communication with stakeholders so as to avoid any information asymmetry as it may lead to unfair trading in the securities market.

    Group and investment holding company reporting

47. Subject to paragraph 4.48 of this Guide, where holding companies and operating subsidiaries are both listed and have to undertake sustainability reporting, the operating entities can report on the ESG factors within their scope of operations. If the ESG factors are also material to the holding company, the holding company may make reference in its sustainability report to the sustainability reports of the operating subsidiaries. If the holding company has material investee companies which are not subsidiaries, its sustainability report should include the selection and management of these investee companies. 
48. IFRS S1 requires an issuer to provide disclosures required by the IFRS Sustainability Disclosure Standards as part of its general purpose financial reports. For climate-related disclosures, an issuer may only make reference to other reports published by the same entity (and not the sustainability reports of its operating subsidiaries).

1. Internal reviews and external assurance increase stakeholder confidence in the accuracy and reliability of the sustainability information disclosed.
2. These procedures over sustainability disclosures should be aligned with the issuer’s existing internal review or external assurance frameworks for other management information, such as financial information or production data.
3. An internal review of the sustainability reporting process builds on the issuer’s existing governance structure, buttressed by adequate and effective internal controls and risk management systems. The internal audit function conducts the internal review, and may involve relevant functions, such as risk management, sustainability or other specialist functions. The identified processes relating to sustainability reporting should be incorporated into the internal audit plan, which should cover key aspects of the sustainability report; the review may take place over an audit cycle, which may span one or a few years in accordance with risk-based planning, as approved by the Audit Committee. The expectations of the Board, management and other stakeholders should be considered as part of the prioritisation. The internal review should be conducted in accordance with the International Standards for the Professional Practice of Internal Auditing (or any subsequent framework or standard including the International Professional Practices Framework and the Global Internal Audit Standards replacing such standards) issued by The Institute of Internal Auditors. If the issuer has reviewed that certain or all key aspects of the sustainability report has been externally assured, the issuer can, as part of its internal review, determine that no further internal review on such aspects of the sustainability report is required under a risk-based approach. 
4. An issuer whose sustainability reporting has already matured after several annual exercises would want to undertake external assurance by independent professional bodies to add credibility to the information disclosed and analysis undertaken. The issuer is encouraged to consider independent external assurance on selected important aspects of its sustainability report even in its initial years, expanding coverage in succeeding years.
5. External assurance involves the engagement of a third party. The scope of the assurance may include a materiality assessment, and cover different aspects of the sustainability disclosures, for example:
   1. data and its associated data collection process;
   2. narratives;
   3. compliance with the specified sustainability reporting framework;
   4. process to identify sustainability information reported; and
   5. compliance with the Listing Rules.
6. External assurance should be performed in accordance with recognised assurance standards, for example the International Standard on Assurance Engagements (ISAE) 3000 (or any subsequent sustainability-specific standard including the International Standard on Sustainability Assurance (ISSA) 5000), the ISAE 3410, the Singapore Standards on Assurance Engagement (SSAE) 3000 (or any subsequent sustainability-specific standard including the Singapore equivalent of the ISSA 5000), the SSAE 3410, the AA 1000 Assurance Standards or the ISO. 
7. An issuer that has conducted external assurance should disclose, in the sustainability report, that external assurance has been conducted, including the scope covered, the identity of the external assurer, the standards used, the level of assurance obtained and key findings.

1. The issuer should report on sustainability at least once a year. The issuer's sustainability disclosure may be done in its annual report. The inclusion of sustainability risks and opportunities with the businesses' other risks and strategy in the same document presents advantages to the user. Sustainability reports contained within annual reports would observe annual report deadlines. Alternatively, if more appropriate for the circumstances of the issuer, the issuer may include a summary in its annual report and issue a full standalone sustainability report within 4 months of the end of the financial year, or where the issuer has conducted external assurance on the sustainability report, within 5 months of the end of the financial year.
2. In either case, the issuer should make available its sustainability reports on SGXNet and on its company website. After a few years of sustainability reporting, the issuer may wish to maintain static information, such as, policies and historical sustainability information, on its website while presenting the current year's changes as well as performance in the annual sustainability report.
3. To provide sufficient time for preparation, a newly listed issuer (other than an issuer that has an obligation to prepare a sustainability report under local legislation prior to listing) may issue its first sustainability report only in respect of its first full financial year after listing.

1. For the first year of sustainability reporting, an issuer new to sustainability reporting should have at least the assessment of material ESG factors, policies and/or practices to address the factors; but if their reporting is lacking in qualitative or quantitative descriptions, they need only state progressive targets for reaching maturity of reporting and do their best to meet them in subsequent years. 
2. For climate-related disclosures, an example of how issuers could report over a few years using the (permanent) structural reliefs and (temporary) transition reliefs in the IFRS Sustainability Disclosure Standards is illustrated in the table below. Issuers may decide on an implementation approach that best suits their circumstance and that complies with the listing requirements.
    

   Illustration of Possible Phased Approach

   Year 1	Year 2	Year 3
   Qualitative climate-related scenario analysis, with disclosure of reliance on the (permanent) structural reliefs*#	Qualitative climate-related scenario analysis, with disclosure of reliance on the (permanent) structural reliefs*#	Climate-related scenario analysis with more quantitative outcomes
   Qualitative disclosure of current financial effects of climate-related risks or opportunities as the effects are not separately identifiable or the level of measurement uncertainty is high  Qualitative disclosure of anticipated financial effects of climate-related risks or opportunities, with disclosure of reliance on the (permanent) structural reliefs*#	Qualitative disclosure of current financial effects of climate-related risks or opportunities as the effects are not separately identifiable or the level of measurement uncertainty is high  Qualitative disclosure of anticipated financial effects of climate-related risks or opportunities, with disclosure of reliance on the (permanent) structural reliefs*#	More quantitative disclosures of current and anticipated financial effects of climate-related risks or opportunities, with disclosure of reliance on the (permanent) structural reliefs*# where necessary
   Limited disclosure of the amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities*	Disclosure of the amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities*	Disclosure of the amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities*
   Determined the scope of its value chain, including its breadth and composition, with disclosure of reliance on the (permanent) structural reliefs*	Determined the scope of its value chain, including its breadth and composition, with disclosure of reliance on the (permanent) structural reliefs*	Determined the scope of its value chain, including its breadth and composition, with disclosure of reliance on the (permanent) structural reliefs*
   Disclosure of reliance on the (temporary) transition reliefs of (a) not using the Greenhouse Gas Protocol and (b) not providing comparative information in respect of the preceding period	Use the Greenhouse Gas Protocol to calculate its GHG emissions Comparative information in respect of the preceding period	Use the Greenhouse Gas Protocol to calculate its GHG emissions Comparative information in respect of the preceding period
   For issuers already disclosing Scope 3 GHG emissions, continue to disclose Scope 3 GHG emissions For other issuers, to build capabilities to report Scope 3 GHG emissions
   * Using all reasonable and supportable information that is available to the issuer at the reporting date without undue cost or effort # Considering the issuer’s skills, capabilities and resources