Mandatory climate disclosures for large Singapore companies move closer

If the plans go ahead, Singapore would become the first Asian country to introduce such requirements for non-listed companies.

The Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation (SGX RegCo) have published a public consultation paper (55-page/2.2MB PDF) requiring listed issuers to report climate-related disclosures (CRDs) from the year 2025 in line with International Sustainability Standards Board (ISSB) guidelines. Non-listed companies which have at least S$1 billion revenue annually would then be required to do so in 2027.

Currently, only five listed issuers in five priority sectors are required to provide full CRDs aligned with the Task Force on Climate-related Financial Disclosure (TCFD) standards, starting in 2023. All other listed issuers are required to apply the TCFD on a "comply or explain" basis.

According to the consultation, both listed issuers and non-listed companies should report CRDs using local standards that reflect the requirements of the ISSB standards.

Mayumi Soh of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, said: “For companies who wish to be prepared ahead of time, they may choose to perform certain complex CRDs, such as greenhouse gases (GHG) scope 3 emissions, within one or two years of the initiation of the reporting requirement.”

Scope 3 emissions are all indirect emissions which occur in the value chain of the reporting company including both upstream and downstream emissions.

According to the consultation, from 2027, all listed issuers and large unlisted companies should get external assurance on their GHG Scope 1 and Scope 2 emissions. Assurance can be provided by ACRA-registered audit firms and testing, inspection and certification companies recognised by the Singapore Accreditation Board.

Additionally, CRDs should be reported and filed at the same time as financial statements to allow for timely communication with shareholders and other stakeholders. The company, its directors or officers should also be held legally responsible to ensure CRD accountability.

The public consultation will close on 30 September 2023.