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  • Ruby Rouben
  • 5 min read

Tackling Singapore’s Enhanced Sustainability Reporting Regime: How Will it Affect You?

Tackling Singapore’s Enhanced Sustainability Reporting Regime: How Will it Affect You?
Inside this Article

Singapore has long been advancing towards prioritising sustainability, expanding its reach to businesses and individuals alike. Today, it is widely recognised that implementing sustainable measures into business models can provide a plethora of benefits, such as reducing environmental impact, boosting credibility and trust, and improving a company’s bottomline.

Talk to Sustainability Experts

On 23 September 2024, the Singapore Exchange Regulation (SGX RegCo) announced that it will be adopting the newest standards developed by the International Sustainability Standards Board (ISSB), an international accounting standards body, into its sustainability reporting regime.

This blog delves into the highlights of the enhanced regime and how it will affect businesses moving forward.

What is the New Enhanced Sustainability Reporting Regime?

As of FY 2025, SGX RegCo has mandated all issuers to begin incorporating Scope 1 and Scope 2 greenhouse gas (GHG) emissions after receiving widespread support from respondents to a public consultation in 2024.

The issuers’ climate-related disclosures must also incorporate the climate-related requirements in the IFRS Sustainability Disclosure Standards issued by the ISSB.

This marks a change from the previous requirement of only certain industries having to perform mandatory climate-related reporting.

The disclosure of Scope 1 and Scope 2 GHG emissions is seen as a key move to support larger issuers to report their Scope 3 GHG emissions. Moving forward, SGX RegCo will review issuers’ experience and readiness before creating a roadmap for implementing the reporting of Scope 3 GHG emissions.

Timeline of Enhanced Sustainability Reporting Regime

Financial Year Listed Companies (ListCos) Large Non-Listed Companies (NLCos)
FY 2025
  • To align with ISSB standards for climate-related disclosures (CRD)
FY 2026
  • To prioritise larger issuers by market capitalisation to report Scope 3 GHG emissions
  • SGX will decide on the threshold
FY 2027
  • External limited assurance on Scope 1 and Scope 2 GHG emissions, subject to SGX RegCo’s further review
  • To align with ISSB standards for climate-related disclosures (CRD)
FY 2028
FY 2029
  • External limited assurance on Scope 1 and Scope 2 GHG emissions

What Are the Differences Between the Task Force on Climate-Related Financial Disclosures (TCFD) and IFRS S2?

Aspect TCFD IFRS S2
Governance
  • Describes the board’s oversight and management’s role with regards to climate-related issues
  • Goes beyond by mandating specific government details, such as:

    • The allocation of climate-related responsibilities among the board and management
    • Distinct evidence of oversight mechanisms and accountability structures
Strategy
  • Recommends companies to reveal the impact that climate-related risks and opportunities have on their business, strategy, and financial planning over the short, medium, and long term
  • Brings advancement by:

    • Mandating the quantitative disclosure of financial impacts where possible
    • Requiring scenario analysis and disclosure of methods and assumptions
    • Connecting the impact of strategy directly to enterprise value and financial performance
Risk Management
  • Encourages the disclosure of processes to determine, assess, and manage climate-related risks and their integration into the company’s overall risk management
  • Enhances this by:

    • Requiring a more detailed disclosure of risk management processes
    • Necessitating the integration of climate-related risks into enterprise-wide risk frameworks and distinct links to financial risk management
    • Emphasising dependencies and interconnections between climate and other business risks
Metrics and Targets
  • Suggests that companies reveal metrics and targets used to review and manage climate-related risks and opportunities, including GHG emissions
  • Fosters this substantially by:

    • Requiring the disclosure of Scope 1 and Scope 2 GHG emissions for all entities, and Scope 3, if material
    • Standardising metrics and targets aligned with international sustainability standards
    • Mandating the disclosure of the methods used to calculate metrics to ensure consistency and comparability
    • Linking metrics and targets directly to financial impacts and progress

InCorp’s risk assurance team, for example, is well-versed in sustainability reporting and assessment. We have in-depth knowledge of global sustainability reporting standards and are equipped with the experience required to effectively evaluate sustainability systems and processes.

Listen to Our Seminar: Navigating Consistency in Sustainability Reporting & Exploring Greenwashing and Legal Risks

Let InCorp Help You Navigate the Enhanced Sustainability Reporting Regime

The enhanced regime can seem confusing to navigate, but with our risk assurance team, you can gain a trusted partner in achieving ESG excellence and compliance. Our team possesses deep expertise in ESG compliance, ensuring your reports align with the latest regulatory standards and industry frameworks.

We streamline the entire process, from accurate data collection to preparation of the sustainability report, so you can focus on growing your business while remaining compliant.

Beyond compliance, we offer strategic insights to help integrate sustainability into the core of your long-term business operations, positioning you for success in a rapidly evolving ESG landscape. With our dedicated support, achieving transparency, stakeholder trust, and sustainability goals has never been more seamless. Contact us to find out more today!

FAQs about Singapore's Enhanced Sustainability Reporting Regime

  • What are the requirements for a sustainability report in Singapore?

  • Some requirements include material ESG factors, climate-related disclosures, a sustainability reporting framework, and targets.

  • What is ESG reporting in Singapore?

  • ESG reporting is a structured approach for companies to disclose their sustainability practices and impacts.

  • Is sustainability reporting a legal requirement?

  • Yes, sustainability reporting is a legal requirement for all companies listed on the Singapore Exchange (SGX). It is also undergoing expansion to include other large entities in the future.

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About the Author

Ruby Rouben

Ruby brings over 16 years of extensive experience in the audit field to the role, the majority of which was spent leading the internal audit and risk advisory engagements across publicly listed companies, institutions of higher learning, MNCs, statutory boards, ministries, and more. In recent years, Ruby has focused on advancing sustainability consultancy services, leading internal evaluations of the sustainability reporting processes for publicly listed companies. This shift underscores Ruby's commitment to enhancing corporate responsibility and environmental stewardship in the business landscape.

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