The first cut is the deepest, but in Scope 3, multiple cuts will be needed

I refer to the article “A closer look at Singtel’s greenhouse gas emissions” (The Business Times, Jul 8). I commend BT for reviewing our latest Singtel Group Sustainability Report 2024. Companies need to expect this level of scrutiny from stakeholders given the importance of transparency in ESG (environmental, social, and governance).

The Singtel Group has always had the practice of aligning disclosures with global standards, science-based targets and explained methodologies. We have obtained external assurance on our key ESG metrics for the last 10 years, including Scope 3 data for the past three years. As with previous years, the external assurance that our auditor EY performed on the 2024 report included our Scope 3 calculation methodology and numbers and its alignment to the Global Reporting Initiative, which is the most widely adopted standard among Singapore-listed companies.

Scope 3 accounting efforts

As Scope 3 emissions occur in the value chain of a reporting company, they are referred to as “indirect emissions”. A collective and concerted approach from all parties across the value chain is needed to deliver improvements, and this is not an overnight journey. A recent survey on Scope 3 by Greenhouse Gas (GHG) Protocol – which provides standards, guidance and tools for business and government to measure and manage climate-warming emissions – highlighted that data collection remains one of the main challenges for Scope 3 accounting. Many respondents found the lack of supplier-specific emissions data and “paywalled” life-cycle inventory emission factor databases to be major hurdles for market-wide adoption.

Singtel has adopted a hybrid accounting methodology since 2023 as this approach addresses the data collection issue outlined above and reflects the different stages of maturity of our supply chain partners.

BT pointed out that Singtel’s sustainability report does not provide enough information to understand how much of our Scope 3 performance came from the application of a new methodology and how much came from actual emissions reductions. We explained in our 2024 report that we are progressively increasing the use of company-level or product-level emission factors (EFs) in our calculations, where available, which will result in significant emissions reductions.

As the first Singapore-based company to join the CDP Supply Chain programme last year, we have been able to increase the number of company-level EFs used in our calculations by engaging our suppliers to disclose emissions data that is relevant to Singtel. We also made progress in identifying activity-specific EFs, such as the product carbon footprint of mobile devices, instead of using a broader spend-based approach which estimates emissions based on the amount of money spent on goods and services.

More recently, Singtel has been applying internal carbon pricing on high-emissions vendors and using a green fund to incentivise business teams to select products with lower embedded and operational product emissions.

We have also achieved emission reductions in other Scope 3 categories disclosed in the report due to the introduction of more electric vehicles in our delivery fleet in Australia and use of more renewable energy across our value chain, including in our external warehouse in Australia and by our regional associates.

Having gone through the journey of refining Scope 3 accounting, we recognise the challenge that many businesses will face and that prompted us to collaborate with PwC, the Singapore Business Federation and relevant government agencies on the development of a Singapore Emission Factors Registry which will help other companies on their emissions-accounting journey.

Restatement and changing baselines

This is the third year of our Scope 3 emissions assessment and we have continued to improve the data quality of our emissions disclosures.

In Scope 3, restatements of baselines for hybrid accounting methodology are not always possible. As an illustration, when we first started out in 2021, we had spend data and industry average emission factors. Through our efforts to engage vendors and collect data over the last two years, we have been able to obtain specific company-level EFs and product-level EFs.

In our sustainability reports, we adopt GHG Protocol’s prescribed practice – “if restatements of historical data are not provided, companies should explain the changes to provide contextual information for interpreting current disclosures”. For other restatements due to errors or omissions, the numbers have been restated in our 2024 report.

We have also adopted the practice of fully re-baselining and resetting targets every few years as changes are more material on a cumulative basis. As part of our SBTi (Science Based Targets initiative) approval process, we completely updated the group’s new scopes 1, 2 and 3 emissions baseline to 2023 given significant reductions in the prior years, establishing new and more aggressive targets approved by SBTi in December 2023. We became the first telco in Asia to demonstrate re-baselining and resetting of SBTi targets and advancing our net-zero target to 2045 in our 2024 report.

Despite these efforts, we still consider ourselves early in this journey of Scope 3 accounting. We will continue to work on directly reducing all scopes of emissions, as well as expanding engagements with partners across our value chain to reduce Scope 3 emissions.

We are heartened that our stakeholders such as the media, investors and regulators are taking an interest to better understand this complex and important topic. It is imperative that everyone in the ecosystem contributes in different ways to collectively bring about progress in a pragmatic manner.

Andrew Buay Vice-President for Group Sustainability Singtel