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1. A new study by the Accounting and Corporate Regulatory Authority (ACRA) and the Sustainable and Green Finance Institute (SGFIN) at the National University of Singapore reveals positive progress in climate reporting by large, listed companies in Singapore. Notably, 78% of these companies belong to carbon-intensive sectors. The study further identifies strategies to bolster climate-related disclosures, ensuring they align with investor expectations and upcoming mandatory reporting requirements.
2. Singapore announced mandatory climate reporting, starting in financial year 2025, to align with its national sustainability goals. Second Minister for Finance, Mr. Chee Hong Tat, unveiled the initiative in February 2024, emphasizing its role in supporting companies during the green transition. The phased approach will see listed issuers report first, using standards aligned with the International Sustainability Standards Board (ISSB). Large non-listed companies will follow suit from 2027, with some exceptions. Companies already aligned with the Task Force on Climate-related Financial Disclosures (TCFD) Framework will have a head start in meeting the new ISSB requirements.

3. A joint study by ACRA and Dr. Sean Shin of SGFIN examined climate disclosures (using the TCFD framework) of 51 large, listed Singaporean companies for 2022. The findings reveal progress, but also areas for improvement.

• Governance: While 94% have assigned climate roles or committees, strengthening board involvement disclosure would enhance investor understanding.
• Strategy: Disclosure of physical and transitional climate risks is strong (88%), but less so for opportunities (61%). Scenario analyses (75%) could benefit from explaining choices, assumptions, and strategy effectiveness. Climate risk integration in financial planning remains low (16%).
• Risk Management: Over two-thirds (71%) disclose climate risk identification, assessment, and management. However, only 24% fully disclose the significance of climate risks compared to others, and only 10% explain their potential magnitude. This limits investor evaluation of the company’s preparedness for future changes.
• Metrics and Targets: Disclosure of Scope 1 and 2 emissions is commendable (96% and 100%), with progress on Scope 3 (59%). Most companies (80%) set emission reduction targets, but interim milestones for tracking progress could be improved. Transparency in opportunity metrics and linking executive pay to climate performance is limited (less than 10%).

4. Beyond highlighting disclosure practices, the study delves into actionable strategies for improved climate reporting. These include:

• Prioritizing progress over perfection: Companies don’t need to wait for perfect data before starting.
• Meaningful links to financial reporting: Connecting climate risks and opportunities to financial performance strengthens investor understanding.
• Future-proofing strategy and business model: Regularly reviewing and adapting to ensure resilience in a changing climate landscape.

5. To help companies prepare for upcoming mandatory climate reporting, several initiatives are underway:

• Sustainability Reporting Grant: Funded by the Singapore Economic Development Board and Enterprise Singapore, this grant helps large companies (annual revenue exceeding $100 million) develop their first sustainability report aligned with ISSB standards.
• Green Skills Committee: Established by the Ministry of Trade and Industry and SkillsFuture Singapore, this committee focuses on developing training programs to equip workers and assurance providers with the skills needed for sustainability reporting.
• Digital Sustainability Solutions: Curated by the Infocomm Media Development Authority (IMDA), these solutions help companies measure, monitor, and manage emissions, particularly Scope 3 emissions within their supply chain.
• Singapore Emission Factors Registry: A collaborative effort by the Singapore Business Federation, Agency for Science, Technology and Research, PwC Singapore, and Singtel, this registry provides conversion factors to translate business activities into greenhouse gas emissions, supporting existing reporting solutions.

6. ACRA is committed to empowering companies on their climate reporting journey. This study equips them with best practices to make transparent disclosures, a key step towards securing green financing and transitioning to a sustainable future,” said Ms. Kuldip Gill, ACRA Assistant Chief Executive.

7. “Our research identified leading practices in climate disclosure among Singaporean listed companies,” said Dr. Sean Shin, Research Affiliate at SGFIN. “These highlight their strong management of climate risks and commitment to sustainability. This positions them well to adapt to upcoming ISSB reporting standards.”

8. Download the full report, “Unveiling Climate-related Disclosures in Singapore: Getting ready for the ISSB Standards,” here: www.go.gov.sg/acra-nus-study.

If your company needs help filing taxes for the year 2024, or requires assistance with Singapore incorporation, economy, banking, etc., feel free to call/WhatsApp us at +65 90612851 or email us at aceglobalacct@gmail.com. Alternatively, you may leave us a reply using our contact form below.

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