Exchange in Focus: SGX to commit to 1.5°C-aligned climate target

23 July 2021

Singapore Exchange (SGX) is committing to a 42% reduction in Scope 2 emissions by FY2031 from the base as at FY2021 (July 2020 to June 2021), pledging to set science-based emissions reduction targets that are consistent with keeping global warming to 1.5°C above pre-industrial levels. For Scope 3 emissions, SGX plans to engage their co-location data centre supplier to set science-based targets within five years. The commitments are based on the criteria and recommendations of the Science Based Targets initiative (SBTi), making SGX the first Asian exchange to join Race to Zero and Business Ambition for 1.5°C.  SGX will submit its verifiable targets to SBTi for validation. SGX planned initiatives to achieve the Scope 2 reductions include:
  • improving the energy efficiency and reducing the carbon intensity of data processing requirements in line with best practices,
  • introducing energy-efficient equipment, processes and policies, and;
  • purchasing Renewable Energy Certificates that meet the Scope 2 greenhouse gas (GHG) Protocol quality criteria through its subsidiary Energy Market Company.  
These actions follow the six steps that corporates are recommended to adopt when reducing GHG emissions, as outlined in the guide on “Credible decarbonisation and transition for corporates in Asia” that SGX launched in June 2021. Written in collaboration with CDP, the Climate Bonds Initiative and HFW, the guide contextualizes the myriad of climate action initiatives and provides corporates with a set of actionable corporate climate mitigation steps.   “Taking climate action is critical and we must do so urgently. Corporates can play a significant role in reducing GHG emissions globally and are encouraged to adopt an internationally accepted carbon mitigation plan. Leading by example, SGX is taking science-based steps and setting ambitious emission reduction targets which contribute to global efforts to reach net-zero emissions by 2050. We believe we must do our part and more, to ensure the continued wellness and prosperity of our society, economies, and businesses,” said Loh Boon Chye, CEO of SGX.  

SSE Climate Action 

To help exchanges lead a transition to more climate-resilient markets using the various tools available to them, SSE published Action Plan to Make Markets Climate Resilient which provides a voluntary practical action plan and bespoke guidance on creating climate-resilient markets. Stock exchanges can help their market to mitigate risks associated with climate change, access growing opportunities, and help align climate-related disclosures to global standards and best practices to ensure their markets are both efficient and resilient. The SSE has also a tool for exchanges titled “Model Guidance on Climate Disclosure: A template for stock exchanges to guide issuers on TCFD implementation” that assists exchanges in guiding their market on how to disclose climate-related financial information. The template is oriented around the Financial Stability Board’s (FSB) Task Force for Climate-Related Disclosures (TCFD) recommendations, the current best practice for climate-related disclosure. Within this guidance the template is written in the voice of an exchange, providing text they may use when they guide their issuers, as well as ideas for strengthening their guidance by adapting it to their market’s circumstances.    

About the SSE

​The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.