From Optional to Obligatory: Singapore's Consultation on Sustainability Reporting

On 7 March 2024, the Singapore Exchange Regulation (“SGX RegCo”) published a consultation paper on sustainability reporting (the “Consultation Paper”), detailing steps to be taken to incorporate the International Sustainability Standards Board (“ISSB”) standards into its sustainability reporting rules for climate-related disclosures. This is in line with the Sustainability Reporting Advisory Committee’s (“SRAC”) recommendation announced on 28 February 2024. 

The Consultation Paper proposes amendments to SGX-ST Listing Rules (Mainboard) (“Mainboard Rules”) and the SGX-ST Listing Rules (Catalist) (“Catalist Rules”, together the “Listing Rules”). This is a step in meeting the global capital markets demand for more consistent, comparable and reliable information on sustainability-related disclosures.

The consultation closes on 5 April 2024.

Highlights of the Consultation Paper

The SGX RegCo is proposing the following:

Mandatory Climate-related Disclosures and Implementation of the ISSB Standards
  • Listing Rules to be amended to incorporate the ISSB standards in the Sustainability Reporting Regime to include the following requirements:
    • Issuers should disclose industry-based metrics and cross-industry metric categories relevant for climate-related disclosures.
    • From FY 2025, issuers should refer to ISSB’s IFRS 1 and IFRS 2 in preparing climate-related disclosures (including structural and transitional relief).
    • From FY 2025, issuers should disclose Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions and the measurement approach.
    • From FY 2026, issuers should disclose applicable categories Scope 3 GHG emissions.
    • Issuers are encouraged to use the ISSB standards for sustainability-related disclosures beyond climate-related disclosures.
  • From FY 2027, issuers will be required to make a statement that its climate-related disclosures are in compliance with the ISSB standards in its sustainability reporting.
Primary Components: ‘Comply or Explain’ Basis to Mandatory Basis
  • Issuers will be required to report on the primary components of a sustainability report on a mandatory basis. This is aligned with the practice in various jurisdiction (i.e. Indonesia, Japan, Malaysia and Thailand).
Reporting Timeframe
  • Moving forward, issuers will be expected to issue its sustainability report together with the annual reports. As the ISSB standards have granted a one-year transitional relief of this requirement, the SGX RegCo is proposing to provide issuers more time to adapt to the new timeline – issuers will be required to comply with this requirement from FY 2026 onwards.
  • For newly listed issuers, the SGX RegCo is proposing that they issue their first sustainability report to encapsulate the first full financial year after listing.
Other Updates

After considering the SRAC’s recommendations, the SGX RegCo highlighted in this Consultation Paper that:

  • they do not currently propose to mandate digital filing of climate-related disclosures, citing that climate-related disclosures may need to be filed with a different regulator in future;
  • they will be consulting the public on relevant amendments to be made to the Companies Act on certain recommendations, including assurance standards, registration criteria for climate auditors and details of bridging courses; and 
  • they do not currently propose to mandate external assurance, but will review this in future. 
Transition Plans

While SGX RegCo currently does not propose to mandate transition plans under the Listing Rules, issuers are encouraged to consider formulating transition plans to harness green and transition opportunities. The SGX RegCo will continue to monitor international and local adoption of transition plan-related disclosure before proposing any related rules.