Singapore to Mandate Climate Disclosures for Listed and Large Non-Listed Companies

Starting from the financial year (FY) of 2025, all listed companies in Singapore will be obligated to make climate-related disclosures, as announced by Minister for Transport and Second Minister for Finance Chee Hong Tat on February 28th. This requirement will extend to large non-listed companies from FY2027. These disclosures are to be based on local reporting standards aligned with the International Sustainability Standards Board, a global accounting standards body. The decision for this phased implementation follows a public consultation conducted by the Sustainability Reporting Advisory Committee, jointly formed by the Accounting and Corporate Regulatory Authority (ACRA) and the Singapore Exchange Regulation.

Mr. Chee emphasized the careful consideration of public feedback before introducing mandatory climate disclosures in phases. Similar requirements have been implemented in other jurisdictions like the European Union and New Zealand. Presently, only listed firms in prioritized industries are mandated to provide full climate-related disclosures, with others doing so on a "comply-or-explain" basis.

Under the new rules, both listed and large non-listed companies will be required to obtain external limited assurance on their scope 1 and scope 2 emissions, with scope 3 emissions being phased in for listed companies from FY2026 and for non-listed companies from FY2029. Scope 1 covers direct emissions like manufacturing facilities, while scope 2 includes indirect emissions from electricity purchase. Scope 3 emissions, which encompass emissions along a company's value chain, will be introduced gradually due to readiness considerations.

The government also acknowledged companies that have already begun sustainability reporting using internationally recognized standards and frameworks, granting them a three-year transitional period exempting them from the new requirements. Additionally, support measures will be provided to assist companies, both big and small, in transitioning towards sustainability reporting and assurance competencies, with more details to be provided by the Ministry of Trade and Industry.

In summary, Singapore's move to mandate climate disclosures for listed and large non-listed companies reflects a commitment to sustainability and aligns with global trends in reporting standards. The phased approach considers industry readiness and aims to support businesses in their transition towards more transparent and environmentally responsible practices.