Singapore Exchange’s (SGX) market regulator, SGX RegCo, has updated its sustainability reporting rules for listed companies, including a delay in mandatory value chain, or Scope 3, emissions reporting requirements for smaller issuers. This decision comes after Singapore’s government announced earlier this year that climate-related reporting would be mandatory for both listed and large non-listed companies. SGX RegCo had previously introduced requirements for issuers to start filing annual climate-related disclosures in alignment with the standards of the International Sustainability Standards Board (ISSB), starting from the financial year 2025.
According to the original plan, companies would report on Scope 1 and 2 emissions in the first year and begin reporting on Scope 3 emissions in 2026. Additionally, companies would need to secure external limited assurance on Scope 1 and 2 emissions two years after they begin reporting. However, Scope 3 emissions, which are the bulk of companies’ carbon footprints, have been controversial due to the difficulty of measuring them. It is very difficult to calculate because it occurs outside the direct control of the company, for example in the supply chain or consumer product use. During the development of IFRS standards, the ISSB allowed companies to implement the reporting requirements in Step 3 for another year. In its latest announcement, SGX RegCo acknowledged the concerns of small issuers, especially regarding the measures for measuring Tier 3 issuances, despite ISSB’s assistance. The regulator said it will assess companies’ readiness before laying out a road map for implementation, and hopes that major issuers will begin reporting on Zone 3 in 2026. Tan Boon Jin, CEO of SGX RegCo, said these changes are the result of efforts to prepare companies for the future. He said reporting on Class 1 and Class 2 pollutants is an important step in enabling larger companies to control and report Class 3 emissions. In addition to climate disclosures, SGX RegCo also introduced updates to broader sustainability reporting requirements. From 2026, companies will have to submit sustainability reports on environmental, social and governance (ESG) aspects, policies, performance objectives and management structures. These reports must be published in a company’s annual report unless they receive external validation, which encourages companies to seek validation outside of their sustainability efforts.