Singapore delays climate reporting for small firms

Singapore’s Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation (SGX RegCo) have announced significant amendments to the timelines for mandatory climate-related reporting requirements. These changes include postponing some disclosures for small and mid-sized companies by up to five years. All listed companies are still required to report Scope 1 and 2 greenhouse gas emissions from the financial year 2025, and the largest listed companies must report on Scope 3 emissions from 2026. However, most companies will see ISSB-based disclosures deferred, with Scope 3 reporting remaining voluntary until further notice.

The regulators attributed the delay to the “uncertain global economic landscape” and feedback from companies, particularly smaller ones, which indicated a need for more time to prepare for climate-related reporting. ACRA Chief Executive Mrs Chia-Tern Huey Min stated that the differentiated implementation approach aims to provide relief for companies less prepared while encouraging those ready to proceed with their reporting.

This announcement follows a request by the Singapore Business Federation (SBF) to delay climate-related disclosure requirements for smaller companies. A survey revealed that only 4% of small and mid-cap companies were “very confident” in meeting the current timeline, citing challenges such as inadequate understanding of requirements, lack of resources, and the need for robust data collection processes. Small- and mid-cap companies represent 84% of listings on the SGX.

The Singapore government announced in early 2024 mandatory climate-related reporting requirements for listed and large non-listed companies, aligned with IFRS Foundation’s International Sustainability Standards Board (ISSB) standards. Initially, reporting obligations were to be phased in starting in 2025 for listed companies, and in 2027 for large, non-listed companies. These obligations included Scope 1 and 2 emissions reporting in the first year and Scope 3 emissions reporting in subsequent years.

In September 2024, SGX RegCo eased some reporting requirements for smaller listed companies, deciding to review companies’ readiness before setting a roadmap for Scope 3 GHG emissions reporting. The new timeline divides listed companies into categories based on market capitalisation, with differing schedules for Scope 1, 2, and 3 disclosures. For non-STI companies, Scope 3 reporting will initially remain voluntary. Other ISSB-based climate reporting requirements will commence in FY2028 for companies with market caps above $1 billion and in FY2030 for those below $1 billion. External assurance for Scope 1 and 2 reporting is deferred to 2029.

For large non-listed companies, Scope 1 and 2 emissions reporting is delayed to FY2030, with external assurance postponed to FY2032. Regulators noted that STI constituents have shown greater readiness for such disclosures, and they encourage all companies to enhance their climate reporting capabilities.

SGX RegCo CEO Mr Tan Boon Gin emphasised the necessity of high-quality climate-related disclosures, recognising the challenges involved. He stated that the new approach is targeted and proportionate, allowing more time for smaller companies while maintaining the start-date for mandatory Scope 1 and 2 GHG emissions disclosures.