Smaller businesses in Singapore are granted an extension for fulfilling climate reporting obligations, to better adjust their operations and data collection processes.
In a move aimed at providing relief to less-ready companies, the Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation (SGX RegCo) have announced changes in the timelines for the implementation of climate-related reporting requirements.
The new timeline, announced in early 2024, will see mandatory climate-related reporting requirements being implemented for listed and large non-listed companies, aligning with the standards issued by the IFRS Foundation’s International Sustainability Standards Board (ISSB).
All listed issuers, including those with market capitalization below SGD 1 billion, will now be required to disclose climate-related information starting from the financial year 2025. Large non-listed companies will follow suit starting the financial year 2027. External assurance of Scope 1 and Scope 2 greenhouse gas emissions is required for all listed issuers from 2027 and for large non-listed companies from 2029. Reporting and submission deadlines align with financial statements timelines to ensure timely communication with shareholders and stakeholders.
However, for large non-listed companies, Scope 1 and 2 emissions reporting will be pushed out to FY2030 from FY 2027. External assurance on Scope 1 and 2 for large non-listed companies is delayed to FY2032 from FY2029.
For non-STI companies, Scope 3 reporting will remain voluntary until further notice. Scope 3 reporting requires companies to report greenhouse gas emissions from activities that they do not directly control but indirectly impact their operations, such as the emissions from the production of the products they purchase.
The regulators cited "the uncertain global economic landscape" and feedback from companies, particularly smaller ones, as reasons for the delay. SGX RegCo eased some reporting requirements for smaller listed companies in September 2024.
The new timeline divides listed companies into three categories: STI constituents, non-STI constituents with market caps above $1 billion, and companies with market caps below $1 billion. Listed companies will still be required to report Scope 1 and 2 greenhouse gas (GHG) emissions from FY2025, and the largest listed companies to report on Scope 3 value chain emission from FY2026.
Small- and mid-cap companies account for 84% of listings on the SGX. The Singapore Business Federation (SBF) had previously requested regulators to delay climate-related disclosure requirements for smaller companies, citing a survey indicating that only 4% of small and mid-cap companies were "very confident" in their ability to meet the current timeline.
ACRA Chief Executive Mrs Chia-Tern Huey Min stated that the delayed implementation provides relief for less-ready companies to build capabilities for the future. The changes aim to strike a balance between environmental sustainability and the practicalities of implementation for companies.
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