Singapore is not pulling back on climate action despite delays in mandatory disclosures: Ravi Menon
Non-STI constituents with a market capitalisation of S$1 billion and above will have to comply from FY2028, an extension of three years
[SINGAPORE] Regulators in Singapore are neither softening their commitment towards sustainability reporting nor pulling back on their climate ambition, despite the recent decision to push back mandatory disclosure requirements, said Ravi Menon, the city-state’s ambassador for climate action on Friday (Sep 12).
“Sustainability reporting remains important and is here to stay. There is no change in the direction of travel, only the pace,” said Menon, who was speaking at a conference organised by the Singapore Institute of Directors.
He added that many companies are still building up the capabilities required to comply with the high reporting standards recommended by the International Sustainability Standards Board (ISSB).
The extension is to give companies more time to build up these capabilities.
“We do not want reporting for its own sake. We want high-quality reporting that will provide useful information to stakeholders,” said Menon.
The Accounting and Corporate Regulatory Authority and Singapore Exchange Regulation announced two weeks ago that most climate reporting requirements for small and mid-sized listed companies – defined as non-constituents of the Straits Times Index (STI) with a market capitalisation below S$1 billion – will be pushed back by five years to FY2030.
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Non-STI constituents with a market capitalisation of S$1 billion and above will have to comply from FY2028, an extension of three years.
The extension follows a recommendation by the Singapore Business Federation (SBF) in June.
The umbrella association of businesses had asked for a one to two-year delay in compliance by listed small and mid-sized companies, citing feedback that the majority were not confident about meeting the original timeline for aligning their climate-related disclosures with ISSB standards from January 2025.
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“Some of you may be wondering if this is a sign that Singapore is softening its commitment to sustainability reporting, or even climate ambition more generally. This is not at all the case,” said Menon.
He added that the revised requirements take a more differentiated approach by scope of reporting and size of company. Previously, all listed companies, regardless of size or sector, had to comply with ISSB-aligned climate disclosures for their 2025 financial year.
“By taking a more differentiated approach, we are aiming to achieve sustainability reporting in a progressive manner, broadening the scope of reporting and extending to more companies over time,” he said.
STI constituents, which make up 75 per cent of total market capitalisation, will still need to stick to the original timeline, and will also have to report indirect emissions resulting from their supply chain – known as Scope 3 emissions – from FY2026.
“They operate in global export markets or supply chains, and need to account for their carbon intensity and transition plans as soon as possible. Their climate-related risks have larger financial implications,” said Menon.
While Scope 3 reporting requirements remain voluntary for the rest of the listed companies, they will still have to report operation emissions (Scope 1) and those arising from the use of electricity (Scope 2) from this financial year.
Menon said that companies are generally ready to disclose these emissions, as it is largely within their control. Maintaining Scope 1 and 2 reporting requirements would mean that companies will have to account for these emissions and be motivated to take steps to reduce them.
Beyond Scope 1 and 2 emissions reporting, however, only 16 per cent of listed companies were able to make other ISSB-aligned disclosures relating to climate-related risks, the metrics used to measure progress, and how these are integrated into their financial planning.
“These other ISSB disclosures are not as easy to do, and we are giving these companies time to build up their capabilities... They need a longer runway to develop their planning and reporting capabilities,” said Menon.
Scope 3 emissions reporting remains voluntary except for STI constituents, as most companies do not have a comprehensive view of all their product components that are manufactured beyond Singapore’s borders.
Menon noted that only 29 per cent of listed companies disclosed Scope 3 emissions in FY2024, given the challenges in measuring these indirect emissions.
“One possible solution is to rely on third-party emission-factor databases. But many of these databases are from the United States and Europe, and may not apply well to Singapore,” he said.
While SBF is working on an emission factors registry suited to Singapore’s context, it will take time to build the database to cover Scope 3 emissions.
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