Sustainability has become a critical success factor for companies to ensure long-term value creation, and there has been a growing demand among investors for enhanced transparency on listed companies’ Environmental, Social and Governance (ESG) practices.
The Executive Management Committee (EMCO) drives sustainability efforts at SGX. The EMCO reports directly to the Board, which has considered sustainability issues as part of its strategic formulation, determined the material ESG factors and oversaw the management and monitoring of these factors.
As the market operator and frontline regulator within the ecosystem, SGX is uniquely placed to be a positive influencer and an enabler of collaboration. We connect stakeholders to drive industry collaboration and catalyse change. As a company, we adopt sustainable business practices, help our customers build sustainable businesses, and advocate transparency and accountability. All of SGX's sustainability initiatives are housed under SGX FIRST (Future In Reshaping Sustainability Together). It is Asia's only multi-partner, multi-asset exchange-led sustainability platform.
Our ESG Risks and Opportunities
We take reference from our robust enterprise risk management system to identify and assess Environmental, Social and Governance (ESG) risks. This approach ensures that material ESG risks are considered in the context of SGX’s overall risk environment, and undergo a structured process of management and monitoring by our EMCO. Where we have assessed the impact of our ESG risks and opportunities to be material, we have addressed them below:
SGX Environmental Policy
SGX views good sustainability practices as important to its business growth over the long term. Whilst the SGX business model has a small environmental footprint, we are committed to environmental sustainability as a responsible business and as an example to other listed companies in Singapore. Our major environmental impacts pertain to the consumption of resources such as energy, water, and paper, as well as business travel related carbon emissions. These areas inform the scope of our Policy.
The SGX Environmental Policy ("Policy") sets out our approach to reducing our direct and indirect environmental footprint. It is the company's objective that the environmental practices set out in this Policy be embedded in our management practices and control principles.
This Environmental Policy covers the Group's operations in all countries where we operate.
3. Governance of Environmental policy
The CFO is responsible for the Policy, which was approved by EMCO.
- The Policy will be reviewed annually and any material changes will be approved by EMCO.
4. Communication of Policy
The Policy shall be communicated to SGX's stakeholders, including but not limited to its employees, shareholders, suppliers, business partners and customers. The Policy shall be published on the SGX Investor Relations website, which is available to the public.
5. The Policy
5.1 Managing direct impact on the environment
- Minimise the use of resources, including electricity, water and paper
- Reduce electricity consumption by conserving energy use in lighting and air conditioning of our business facilities and data centres.
- Minimise water consumption.
- Reduce overall usage of paper, and replace with FSC certified low grammage paper where possible.
- Reduce environmental impact by reducing non-essential travel and maximise use of alternative means of internal and external communication, for example, video conferencing.
- Promote the reduction, reuse and recycle of materials and waste among employees such as using double-sided printing as default printer settings, recycle toners, use of recycled paper and encouraging separation of waste.
- Comply with all relevant environmental legislation in all countries in which we operate.
5.2 Managing indirect impact on environment
- Raise awareness of environmental issues among employees
- Encourage corporate volunteering for environmental causes and contributing to spreading awareness.
- Encourage employees to adopt environmentally responsible behavior.
- Carry out purchasing activities and interactions with our vendors in an environmentally responsible manner
- When engaging with new suppliers, we pro-actively look out for potential partners who operate in an environmentally responsible manner, and preferably have a declared environmental policy.
- Suppliers submitting tenders for projects mandating a request-for-proposal (RFP) process are required to take part in a Sustainability Survey as part of the RFP process. Beginning FY2016, we commenced extending the Survey to vendors on the SGX Preferred Vendor List. The Survey gathers information from suppliers on their corporate governance, workplace practices and environmental management, and allows us to assess their sustainability values and behaviours. By including vendors' sustainability practices in our selection criteria, we ensure we support the right behaviours throughout our supply chain.
5.3 Reporting of environmental targets
- SGX measures its progress against set targets and reports progress periodically in its quarterly sustainability committee meetings.
- SGX reports our environmental performance externally to our stakeholders as part of our sustainability reporting in our annual report.
SGX Compliance Framework Statement
SGX adopts a comprehensive framework that addresses relevant organisational compliance risks. This is set out in a Compliance Charter, which sets out the roles and responsibilities for each function.
The Board is responsible for ensuring that risks are managed, and that senior management resolves compliance issues effectively and expeditiously. Compliance risks are also specifically overseen by the Board’s Audit Committee. SGX’s senior management, led by its Executive Management Committee (EMCO), is accountable for establishing policies and procedures in each of their areas of responsibility. Each SGX employee is also ultimately responsible for addressing applicable compliance risks.
The Board and senior management are in turn assisted in their tasks through independent control functions, including Compliance and Internal Audit. The Compliance function acts as an independent guardian for identifying and managing compliance risks and controls, and serves as an adviser to operating units in conducting SGX’s activities in a manner that complies with applicable laws and global standards.
SGX has a suite of various policies dealing with a range of issues, including but not limited to the following. Further information on some of SGX’s key policies are further described below.
- Anti-money laundering and countering the financing of terrorism (AML/CFT)
- Anti-bribery and corruption
- Conduct and ethics
- Compliance with cross-border laws and regulations
- Personal data and privacy protection
- Staff personal dealing restrictions
- Whistleblowing channels
SGX conducts an annual mandatory training programme on the relevant policies, procedures and issues to ensure a high level of awareness through the organisation. Further training for relevant employees and units is conducted on a risk-assessed basis through the year.
Conduct and Ethics Policy
SGX holds itself to robust ethical standards, which is lived out in its employees’ conduct. The Conduct and Ethics Policy forms the foundation for the conduct expected of every employee. The Policy is maintained by an independent Compliance function, while endorsed by both the Board and EMCO.
SGX has established several key pillars under the Policy, including the following:
- Overall conduct. Employees must conduct themselves with professionalism, honesty and integrity at all times. They must avoid engaging in any activities that result in a conflict of interest in relation to their roles, and declare such conflicts where they arise.
- Stewardship of information. Employees must keep confidential and ensure proper use of information and property that they possess. This includes information that relate to SGX’s customers and stakeholders, or other proprietary information. Employees are strictly prohibited from using information they receive in the course of their work for unauthorised purposes or personal gain.
- Interaction with stakeholders. Employees must make every effort to achieve complete, accurate and timely communications, in order to facilitate informed decisions to be made by SGX’s stakeholders.
- Controls and governance. Employees must comply with both the spirit and letter of all laws, regulations, and other requirements applicable to SGX. They must also ensure that an effective system of internal controls is instituted for their respective areas of responsibility. This imbues SGX’s stakeholders with the confidence that proper governance is actively in place at all times.
Anti-Corruption, Gifts and Entertainment Policy
SGX has zero tolerance for bribery and corruption. The Anti-Corruption, Gifts and Entertainment Policy serves to ensure compliance with applicable anti-corruption legislation. The Policy extends to all of SGX's business dealings in all countries in which it operates. The principles in the Policy also apply to all SGX subsidiaries. SGX further expects its partners and vendors to adhere to anti-corruption standards and have appropriate controls in place. SGX will always forgo business rather than pay bribes and fully supports its employees in this regard.
In general, the term "bribery" or "corruption" in the Policy refers to offering or receiving an advantage, whether in cash or in kind, and whether by SGX or through an intermediary appointed by SGX, and with a corrupt intent. It does not matter whether the bribe is actually successful, as the corrupt act of offering or receiving a bribe can be sufficient to establish the offence. All facilitation payments are prohibited.
SGX has established detailed procedures and monetary thresholds to govern the approval and declaration of meals, gifts, entertainment, travel and accommodation, charitable contributions, and sponsorships. Compliance with these procedures is regularly reviewed by the independent Compliance function, which reports any key findings to the Board-level Audit Committee.
All employees must neither give nor receive any gift or entertainment that is disproportionate to a particular occasion, even if the monetary thresholds are complied with. Employees should also avoid giving or accepting cash or cash-equivalent gifts. Similarly, care should always be taken to ensure that the provision and receipt of any charitable contributions and sponsorships do not create reputational risk, or the potential for real or perceived conflicts of interest, particularly in SGX's capacity as a regulator.
Anti-Money Laundering, Terrorism Financing and Sanctions Policy
SGX is committed to high standards of AML/CFT governance, including ensuring that relevant laws are complied with and SGX’s activities are not used as a conduit for illicit purposes. The Policy includes measures to report suspicious transactions, adequate due diligence measures, monitoring of new and existing business relationships for risks, a prohibition on dealing with sanctioned entities, among other related matters.
Personal Data Protection Policy
SGX supports the objectives of data protection laws in safeguarding personal data from misuse and balancing the need for individual privacy against legitimate business needs. SGX maintains a Personal Data Protection Policy, which sets out its policy and procedures for compliance with applicable privacy laws in this regard.
Misconduct Reporting and Handling
Any suspected breach of SGX’s policies or laws are immediately referred to the Compliance function for investigation and assessment, including disciplinary action if necessary. SGX has a Staff Disciplinary Policy that sets out a consistent process for the assessment, escalation and disciplinary proceedings relating to such non-compliance.
SGX also maintains a Whistleblowing Policy, which seeks to provide a safe avenue for employees, stakeholders or members of the public to report any misconduct or material concerns. Please see https://investorrelations.sgx.com/whistleblowing-policy for further information on the Whistleblowing Policy and the available reporting channels.
Procurement Policy Statement
SGX has put in place an organization-wide Procurement Policy that establishes guiding principles and policies pertaining to procurement of goods and services for compliance by all internal units performing procurement of goods or services. Procurement includes activities involved in establishing needs or requirements, sourcing activities such as market research and vendor or partner evaluation, negotiation of contracts and the purchasing activities required to order and receive goods and services.
There are seven guiding principles as follows:
- Transparency. The procurement regime shall be open and transparent across all stages of the procurement cycle. Objectives, criteria and procedures shall, as far as possible, be made known to vendors.
- Open and fair competition. An open and competitive environment will encourage vendors to give their best offers. Vendors shall be given equitable access opportunities to compete on a level playing field.
- Value for money. Goods or services shall be procured from sources that can best meet SGX requirements and offer the best value. Value for money is defined as the optimum combination of whole-of-life costs and quality (or fitness for purpose) of the goods or services to meet the user’s requirement. Thus, value for money does not necessarily mean the lowest price.
- Integrity. Procurement activities shall be discharged professionally and ethically in a manner consistent with good purchasing practices. In this regard, staff engaged in procurement activities shall not place themselves in a conflict of interest position and observe the Gifts/Entertainment Policy contained in the Code of Conduct and Ethics. Employees engaged in corrupt practices or are in collusion with vendors or other parties will be severely dealt with.
- Efficiency. Procurement processes shall be carried out as cost effectively as possible with reasonable time and expense incurred for the parties involved.
- Support Sustainability objectives. Procurement of goods and services should support SGX’s sustainability objectives wherever possible.
- Accountability. Each Unit engaged in procurement activities shall discharge its responsibilities with regards to procurement and will be answerable for its plans, actions and outcomes.
Employee Recruitment Statement
Diversity and Inclusion
SGX thrives on the diversity of our workforce. We work hard to ensure that all employees feel included regardless of their roles in SGX. We recognize that a diverse and inclusive workforce broadens our collective skills and perspectives as an organization. This in turn drives growth and leverages SGX’s full potential.
In talent recruitment, we hire based on merit, and provide a competitive and fair compensation and benefits package with “equal pay for equal work”, engendered by our non-discrimination policy. As a result, we sustain our diverse mix of staff by gender, age and seniority.
SGX adopts a compensation philosophy that is directed towards the attraction, motivation and retention of talent to achieve our business vision and create sustainable value for our shareholders. It emphasizes a pay-for-performance principle by linking total compensation to the achievement of organizational and individual performance objectives. There is no minimum wage in Singapore, but we pay competitive salaries aligned to the financial services sector to maintain market competitiveness.
Eligible employees are entitled to participate in collective bargaining agreements. The collective labor agreement covers areas such as disciplinary procedures; employment policies (probation, termination, overtime, and so on); remuneration and allowances; leave entitlement; and other benefits.
As a company headquartered in Singapore, SGX is committed to fully complying with the Employment Act (Chapter 91). The Act spells out policies relating to contracts of service, payment of salary, rest days, employment of young persons, childcare leave etc.
The exchange sector is a specialized industry relative to other financial services. Our business model and value creation process requires talents and expertise which are not readily transferable from the wider financial services industry. We seek to attract and retain the best staff through our talent strategy, the key elements of which include the following:
- Promote diversity and inclusion within a non-discriminatory work environment
- Regularly engage employees in various ways around strategy, business performance, community initiatives and commitment to their overall welfare
- Provide opportunities for employees to learn, develop and grow
- Renew and develop current and future leadership for succession planning
We foster an inclusive work environment centres on regular employee engagement. We ensure that our people’s diverse views and needs are heard and addressed. Apart from running speaker series and brown bag lunch talks where managers connect with employees in more intimate settings, we also promote diverse activities in which employees can get involved in making contributions to the wellbeing of the organization and the wider community. These include family oriented events, internal reward events, as well as community initiatives such as the annual SGX Bull Charge. Such activities allow our employees to connect more deeply with SGX as a company and through that develop stronger organizational identity.
We have put in place a policy and framework on the handling of employee grievances. This is to ensure that all employees are adequately heard and that appropriate follow-up action be taken, where necessary.
Support for Parents and Families
SGX understands how important family is to our employees. We support our employees in balancing their professional life with domestic responsibilities, by providing them parental leave in line with statutory requirements, as well as flexible working schemes for female staff after childbirth.
Training and Development
SGX believes strongly in the continuing training and development of our people. We subscribe to the policy of lifelong learning, to encourage our employees to explore and unlock their full potential, while equipping them with transferrable skills and knowledge that go beyond the required expertise of their current roles. To achieve this, we provide employees with a variety of training, professional memberships, continuing education scheme, study leave, and internal job rotation opportunities. All employees are also given regular performance reviews and target setting sessions at least once a year with their managers.
We focus on leadership renewal and development to shore up our current capabilities while developing our bench strength for future needs. Every year as part of our future leadership pipeline, we recruit new graduates into the Management Associate programme, where they undergo two rigorous years of job rotations and career development. We specifically monitor competency requirements for strategically critical roles, and maintain a line of sight for high-potential internal candidates, proactively providing them with development opportunities to raise their level of readiness.
Encouraging Corporate Social Responsibility (CSR) Participation
The company is committed to make a difference in the lives of the less fortunate in our community. To this end, we are actively engaged in fund raising activities and voluntary work with the aim to address the needs of our adopted welfare and charitable organizations. To support our CSR effort, all employees are eligible for paid volunteer leave and may utilize this leave for the purpose of engaging in voluntary work organized by the company.
FY 2020 Sustainability Report GRI Content Index
For the full Sustainability report, please refer to pages 40 to 50 of the FY2020 Annual Report.
For the full Sustainability report, please refer to pages 44 to 55 of the FY2019 Annual Report.
For the full Sustainability report, please refer to pages 40 to 51 of the FY2018 Annual Report.
For the full Sustainability report, please refer to pages 34 to 45 of the FY2017 Annual Report.