The much-anticipated guidelines now exclude a agency timeline for disclosing Scope 3 emissions or oblique worth chain emissions, which generally account for over 70 per cent of a agency’s carbon footprint.
The unique timeline for Singapore-listed corporations to start out disclosing their Scope 3 emissions was 2026, in step with the ISSB’s one-year transition aid for doing so.
In a media launch on Monday, Singapore Alternate Regulation (SGX RegCo) shared that in its public session some respondents had “highlighted challenges” with Scope 3 reporting. Smaller issuers significantly had difficulties, “in relation to the evolving measurement and reporting methodologies for Scope 3 greenhouse fuel emissions”, stated the regulator. That is even after making an allowance for ISSB’s built-in one-year grace interval, it added.
SGX RegCo will solely begin establishing a roadmap for reporting Scope 3 emissions after assessing the readiness of issuers, with “ample discover” given to issuers earlier than the efficient date. “The present plan is to prioritise bigger issuers… with the intention that they report Scope 3 greenhouse fuel emissions from FY2026,” it stated.
In June, a survey by the nation’s nationwide accountancy physique discovered that 9 in 10 native companies have but to totally measure their Scope 3 emissions. Amongst those that have set Scope 3 emission discount targets, solely 27 per cent are assured of attaining them, in comparison with 40 per cent and 31 per cent for Scope 1 and 2 emissions, that are from an entity’s personal operations and vitality use.
SGX RegCo’s public session on the proposed amendments to its sustainability reporting regime – which concluded in April – garnered feedback from 52 respondents, together with the asset supervisor BlackRock, sovereign wealth fund Temasek, requirements physique World Reporting Initiative (GRI) and the Huge 4 audit companies Deloitte, Ernst & Younger, KPMG and PwC.
The session was launched the week after the Singapore authorities introduced that ISSB-aligned local weather reporting might be made obligatory for listed and huge non-listed corporations beginning as early as 2025.
“The disclosure of Scope 1 and Scope 2 greenhouse fuel (GHG) emissions is a crucial step to allow bigger issuers to report their Scope 3 GHG emissions. SGX RegCo on our half will proceed to facilitate capability constructing to help issuers on their local weather reporting journeys,” stated chief government officer Tan Boon Gin.
In April, Hong Kong equally introduced that listed corporations might want to begin disclosing Scope 1 and a pair of emissions from 2025. Earlier this month, Australia handed a brand new regulation mandating local weather reporting for big and medium-sized corporations beginning subsequent yr, which can lengthen to Scope 3 emissions a yr after, in step with ISSB suggestions.
Elsewhere within the area, China, Japan and Malaysia have launched consultations on implementing related guidelines of their respective jurisdictions.
A big majority of respondents agreed with SGX RegCo’s proposal to make climate-related reporting obligatory for all issuers, versus the present requirement – based mostly on the Job Pressure on Local weather-related Monetary Disclosures (TCFD)’s suggestions – which solely applies to 5 sectors.
As of 2024, solely these within the monetary, agriculture, meals and forest merchandise, vitality, supplies and buildings in addition to the transportation industries are subjected to obligatory TCFD-aligned reporting.
Different main parts of a sustainability report – which embrace environmental, social and governance (ESG) elements which can be materials to a agency and board assertion for sustainability practices – which can be at the moment solely required on a “comply or clarify” foundation might be made obligatory come 2026.
SGX RegCo additionally famous that it obtained requests for extra steerage on find out how to make disclosures close to different requirements like GRI – which stays the preferred normal amongst issuers. Respondents additionally requested that it mandates different frameworks to deal with influence materiality that considers a agency’s influence on the atmosphere and society, on prime of how sustainability-related elements impacts its monetary efficiency.
Exterior assurance and transition plans not but required
In accordance with the media launch, SGX RegCo won’t be mandating exterior assurance – or an impartial audit of a agency’s sustainability report – on Scope 1 and a pair of emissions, and plans to carry a separate public session on the proposed timeline to mandate this ranging from 2027.
Below the brand new obligatory guidelines, listed companies that don’t audit their sustainability reviews might want to subject them along with their annual reviews from 2026.
Nevertheless, as an interim measure to encourage issuers to conduct exterior assurance earlier than it turns into obligatory, SGX RegCo will proceed giving those that accomplish that as much as 5 months after the tip of their monetary yr to subject their sustainability reviews, in step with SGX RegCo’s current steerage.
SGX RegCo famous that the transitional measure might be reviewed when consulting on exterior assurance, given “the advantages related to concurrent issuance of sustainability reviews and annual reviews” which permits for “an built-in view of an issuer’s efficiency”. It didn’t specify when it plans to seek the advice of on this subject.
SGX RegCo has additionally not mandated the disclosure of transition plans – which ISSB chair Emmanuel Faber has deemed “the way forward for local weather reporting” – underneath its new guidelines, although its CEO revealed a column on creating a reputable local weather transition plan final yr.
With the ISSB taking up the United Kingdom-led Transition Plan Taskforce’s duty of creating a world steerage for company local weather transition plans as of June 2024, the worldwide requirements physique might be searching for to standardise the way in which companies put out their transition plans to satisfy net-zero targets.
