The framework of stewardship stems from the fact that the world is highly interdependent, and the model of shareholder capitalism with a short-term focus on profit puts sustainability and long-term returns at risk.
In today’s capital markets, the investment value chain links investors to investee companies, with a rising variety of multi-faceted investment strategies across different asset classes. Asset ownership is fragmented, with many shareholders each holding a small proportion of shares. Coupled with increasingly shorter shareholding tenure, investors’ ownership mentality risks being eroded and replaced by a short-term view of investment and portfolio management.
Stewardship is important for the business and investment ecosystem, which includes investors and investees, because it promotes sound business practices, resulting in long-term value creation and positive outcomes for not only the capital markets, but also the environment and society at large.
Effective investment stewardship is investors exercising responsible allocation, management and oversight of capital, through active ownership and engagement, to create and preserve enterprise value within portfolio companies, and improve long-term risk-adjusted returns for clients and beneficiaries. Active ownership and engagement refer to the use of investors’ rights to shape better corporate behaviour and support positive environmental, social and governance (ESG) practices to sustain long-term value creation.
Singapore Stewardship Principles for Responsible Investors (SSP)
The Singapore Stewardship Principles for Responsible Investors (SSP) is intended to enhance the investment environment by providing guidance to institutional investors. The SSP aims to encourage institutional investors to effectively exercise their stewardship responsibilities in a way that promotes sustainable company performance and deliver long-term risk-adjusted returns on their investments.
Singapore first introduced the SSP in 2016, outlining practices related to the core behaviour and actions associated with stewardship to promote active and responsible investment. Since then, capital markets have undergone profound developments as global concerns intensified over the impact of financial investments on the economy, society and the environment. More stakeholders are emphasising that investors should become better stewards by demonstrating a genuine intent to deliver sustainable performance and long-term value to clients and beneficiaries, as well as to factor in environmental, social and governance (ESG) considerations.
The SSP is developed and administered by a Steering Committee led by Stewardship Asia Centre and supported by the Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX).
Taking into account the developments in the industry, the SSP Steering Committee embarked on an exercise to enhance the SSP in 2021. The committee issued a public consultation to solicit feedback from the industry in November 2021. To view the Steering Committee’s response to the consultation, please click here. Following the consultation, the committee considered the feedback and enhanced the SSP to provide more effective guidance.
In the revised SSP, changes have been made to reflect and incorporate evolving developments in the investment landscape. They include:
• The identification of internal structures and governance of institutional investors guiding their stewardship activities
• The application of stewardship to asset classes beyond listed equities
• The integration of ESG considerations into investment decision-making and stewardship practices
• An outcomes-oriented approach to applying the Principles
The updated SSP (also known as SSP 2.0) was launched on 31 March 2022 To view the press release, please click here.
Support the SSP
Click here for the list of organisations that have expressed support for the SSP.
By signing up to the SSP, investors are demonstrating their intent to deliver long-term value for their clients and beneficiaries and enhance sustainability efforts in the investment value chain.
For more enquires about the SSP, please submit your interest here.
SSP signatories can showcase the SSP logo to declare their commitment to the SSP. Signatories are highly encouraged to display the SSP logo on their websites and publications.
* There are no fees required to support the SSP.
SSP Steering Committee
The SSP Steering Committee is an industry-led collaboration among organisations that are committed to enhancing Singapore's investment environment. Led by Stewardship Asia Centre, its focus is on encouraging responsible and active investors in Singapore through clear stewardship orientation and related practices.
The SSP is supported by the Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX).
Frequently Asked Questions about SSP
About the SSP
Broadly, stewardship codes are developed to promote the responsible allocation, management and oversight of capital to create sustainable value for not only shareowners but also beneficiaries and other stakeholders. The codes aim to encourage investors to be effective stewards of the assets entrusted in their care. They foster transparency, improve communication and enhance corporate governance to sustain the healthy functioning of the markets. With increased scrutiny on ESG and climate impact, the codes encourage investment activities that lead to sustainable benefits for the economy, the environment and society.
Globally, stewardship codes have been introduced in over 20 countries. In general, stewardship codes take the form of best practices such as establishing and disclosing a stewardship policy, managing and engaging with investee companies, having a policy to manage conflicts of interest, and disclosing voting policies and voting actions taken. Different codes have different requirements of their signatories.
The investment market has evolved since the first iteration of the SSP was introduced in 2016. In recent years, investors have been called to be responsible stewards by focusing on the outcomes of stewardship and integrating ESG considerations into the investment process.
The Steering Committee considered global market developments in shaping the principles. A key aspect of the SSP 2.0 is requesting signatories, in line with their fiduciary duties, to integrate ESG criteria into their investment practices. Signatories are also encouraged to adopt an outcome-oriented approach in applying the Stewardship Principles. In addition, they are recommended to demonstrate how they apply stewardship in different asset classes as appropriate.
The overall objective is to drive increased adoption of the principles and encourage the investment community to take the lead and be proactive stewards of not only the assets entrusted in their care but also the environment and the society at large.
The SSP Steering Committee undertook research of the stewardship codes in other jurisdictions and drew on the best practices in drafting the principles. An industry survey was conducted in March 2021 to garner feedback from the asset management industry on their perspective of investment stewardship. This was followed by an open consultation to obtain stakeholders’ feedback on the draft of the updated SSP in November 2021. The enhanced SSP, also known as SSP 2.0, was officially launched in March 2022.
The SSP is not intended to be rigid rules to be enforced or prescriptive measures to be adhered to, nor is it intended to constitute a code. Using the principles as an overarching framework, signatories can choose to apply the principles or explain what they do to fulfil the aim of the principles. Under the revised principles, they are strongly encouraged to submit evidence of their stewardship efforts annually to the secretariat. This can come in the form of a stewardship report supplemented by data and case studies.
Supporting the SSP
Enhanced stewardship and ESG integration are critical in the promotion of better corporate governance and business practices, which in turn help investors manage risks and improve long-term portfolio performance. Organisations that adopt the SSP may use the SSP logo in their marketing collaterals to showcase their commitment towards the principles.
Organisations can indicate their interest to support the SSP by either emailing the secretariat (email@example.com) or filling up the contact form here.
There is no independent/external monitoring of the SSP. However, signatories are strongly encouraged to use the principles as a guide to report the outcomes of their stewardship activities in a self-regulated manner and submit evidence of their stewardship efforts annually to the Secretariat. This can come in the form of a stewardship report supplemented by data and case studies. The SSP Steering Committee will continue to engage the investor community to explore ways to guide existing and new signatories to implement the principles effectively.
The objective of the submissions is to motivate signatories to demonstrate their stewardship efforts in an outcomes-based manner. Submissions that have demonstrated stewardship efforts and case studies in line with the principles will be considered by the Steering Committee to be published online.
There are no fees required to support the SSP.
The SSP Steering Committee
SSP is supported by the Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX). The principles should be read in conjunction with applicable local legislation and regulations. They are designed to complement stewardship codes that are in place in other jurisdictions and investors may wish to utilise the principles alongside other local and international frameworks to achieve effective stewardship outcomes.
The Steering Committee was officially established on 2 November 2016. It comprises the following organisations:
• Stewardship Asia Centre
• Association of Chartered Certified Accountants
• Asia Pacific Real Assets Association
• CFA Society Singapore
• CPA Australia
• Investment Management Association of Singapore
• Institute of Singapore Chartered Accountants
• Securities Investors Association (Singapore)
• Singapore Institute of Directors
• Singapore Venture Capital & Private Equity Association
• Stewardship Asia Centre