Climate Reporting Advancements and Mandatory Disclosure Initiatives in Singapore

A study by the Accounting and Corporate Regulatory Authority (ACRA) and the Sustainable and Green Finance Institute (SGFIN) at the National University of Singapore found that larger listed companies, 78% from carbon-intensive sectors, are progressing well in climate reporting. The study recommends strategies to enhance climate-related disclosures to meet investor expectations and mandatory reporting requirements.

Mandatory Climate Reporting in Singapore

Announced by Second Minister for Finance, Mr. Chee Hong Tat, mandatory climate reporting will start in 2025 for listed issuers and 2027 for larger non-listed companies, aligned with the International Sustainability Standards Board (ISSB) requirements.

Key Findings from the ACRA-SGFIN Study

1.???? Governance:

94% of companies have committees for climate risks, with 75% involving the Board in climate matters. There's a need to improve disclosures on the Board’s role in shaping performance objectives.

2.???? Strategy:

88% disclosed physical and transitional climate risks, but only 61% disclosed related opportunities. Companies should clarify scenario choices and describe strategy resilience. Only 16% fully disclosed climate risk incorporation into financial planning.

3.???? Risk Management:

71% disclosed processes for managing climate risks, but only 24% detailed the significance of these risks, and 10% explained their potential magnitude.

4.???? Metrics and Targets:

High disclosure rates for Scope 1 and 2 emissions (96% and 100%, respectively) and progress on Scope 3 emissions (59%). Most companies (80%) have set emissions reduction targets, but interim milestones and transparency in linking executive pay to climate performance need improvement.

Support Initiatives

1.???? Sustainability Reporting Grant:

Funding support for large companies to produce their first sustainability reports before mandatory reporting takes effect.

2.???? Green Skills Committee:

Developing skills and training programs for the low-carbon economy.

3.???? Digital Sustainability Solutions:

IMDA's Advanced Digital Solutions (ADS) scheme to help enterprises manage emissions and improve Scope 3 reporting.

4.???? Singapore Emission Factors Registry:

Providing conversion factors for business activities into greenhouse gas emissions.?

ACRA and SGFIN Statements

ACRA and SGFIN emphasize their commitment to guiding companies in adopting best practices for climate reporting, enhancing transparency, and facilitating the transition to a greener business model.