Singtel has the highest ESG rating amongst Singapore telcos: Maybank

Singapore’s top telco displayed the highest degree of ESG disclosure.

Singtel has the highest ESG rating within the telco sector, according to Maybank Securities Singapore’s metrics.

According to Maybank Securities, Singtel is committed to improving the group ROIC to a high single digit whilst protecting its ability to pay sustainable dividends. 

Singtel also displays a very high degree of transparency in its ESG disclosures and there are no major compliance issues, with an overall ESG score is 85, which is above average on Maybank’s ESG rating.

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Amongst its ESG goals, Singtel targets a 25% reduction in Scope 1 and 2 GHG emissions by 2025 from its 2015 baseline. Against this target, the telco has thus far achieved a 3.3% reduction. In FY2022, Singtel identified 15 categories of indirect GHG (Scope 3) emissions from its value chain. There is, however, no mention of its progress on sustainable financing target for which it should be looking to establish a baseline soon.

Maybank expects Singtel to improve its ROIC to a high single digit in the next two to three years, up from 5% in FY 2022. Proceeds from asset recycling would be used to cover incremental 5G capex in Australia and current growth engines (regional data centre, NCS).

“We like Singtel’s ability to pay sustainable dividends. With stronger core operating cashflows and an expected earnings recovery, we expect future dividends to grow in line with earnings, at 70-75% payout ratio as compared to its dividend policy of 60-80% of underlying net profit,” Maybank said