Smaller corporations in Singapore are granted additional time to prepare for climate reporting requirements, as these are delayed.
Singapore Announces Revised Timeline for Mandatory Climate-Related Reporting
The Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA) have announced changes to the implementation timeline for climate-related reporting requirements for companies listed on the Singapore Exchange (SGX).
The new timeline, announced in early 2024, 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.
Under the revised timeline, listed companies will still be required to report Scope 1 and 2 greenhouse gas emissions from Financial Year (FY) 2025, and the largest listed companies to report on Scope 3 value chain emissions from FY 2026. However, for large non-listed companies, Scope 1 and 2 emissions reporting will be pushed out to FY 2030 from FY 2027.
The regulators cited the uncertain global economic landscape and feedback from companies, especially smaller ones, as reasons for the delay. External assurance for all companies' Scope 1 and 2 reporting is pushed out to 2029.
For STI constituents, the start-date for mandatory Scope 1 and 2 GHG emissions disclosure remains the same. STI constituents have demonstrated a higher degree of readiness and capabilities for such disclosures. Scope 3 reporting for these companies is expected to start from the reporting year 2024, under the EU's Corporate Sustainability Reporting Directive (CSRD). However, some simplifications and extensions of reliefs for certain companies apply for 2025 and 2026.
SGX RegCo eased some reporting requirements for smaller listed companies in September 2024. For most other companies, the disclosures are being delayed, and Scope 3 reporting will remain voluntary until further notice.
The Singapore Business Federation (SBF) had previously requested regulators to delay climate-related disclosure requirements for smaller companies due to challenges such as an incomplete understanding of disclosure requirements, lack of time and resources, and the need to set up robust data collection processes.
Other ISSB-based climate reporting requirements will now begin in FY 2028 for companies in the $1 billion+ market cap group, and in FY 2030 for companies with market cap below $1 billion.
It is important to note that sustainability reporting is considered a crucial tool for companies to support their sustainability strategy and for accountability to their stakeholders. The regulators' approach provides relief for less-ready companies in the near term, allowing them to build up capabilities for the future, while requiring more-ready companies to progress with their reporting.
Small- and mid-cap companies account for 84% of listings on the SGX, underscoring the importance of this revised timeline in supporting the development of a sustainable and resilient Singaporean economy.
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