Singapore’s top listed firms face climate data gaps a year into mandatory reporting

Singapore’s largest listed companies are still grappling with gaps in climate data a year into tougher reporting rules, an Eco-Business review found, as regulators propose stricter compliance requirements from 2028.

Many of the 24 Straits Times Index companies whose first reports Eco-Business reviewed did not quantify the financial impact of climate risks, while some had yet to obtain independent verification of their emissions. The other six STI companies are not included: three have September financial year-ends, so their first reports under the new rules are not due until early 2027, while three are secondary listings broadly exempt from SGX’s sustainability reporting rules.

Under changes proposed by the Accounting and Corporate Regulatory Authority (ACRA) would require listed companies to declare full compliance with the climate reporting standard from the 2028 financial year and publish sustainability reports alongside their financial statements. Public consultation closed on 25 October. Independent checks on companies’ own emissions are due to begin a year later under an existing timetable.

Consultants, assurance providers and company representatives interviewed by Eco-Business called for clearer guidance on compliance, more time to improve data and a practical approach to reporting supply-chain emissions. Disclosures, said these industry stakeholders, should help shape business planning and investment.

A cautious first year in exercise

Sixteen of the 24 companies published their climate disclosures with their annual reports, while at least five released them weeks later, as the rules allow.

Independent verification on emissions figures, known as assurance, are voluntary until FY2029, and approaches varied in the first year of reporting. Around 10 companies opted for limited assurance, in which an outside firm reviews the figures and reports whether they are free from material misstatement.

CapitaLand Investment chose reasonable assurance, which involves more extensive testing and is closer to a financial audit; and a few, including SATS and Yangzijiang Shipbuilding, did not undergo assurance.

Many also deferred putting a financial value on climate risks and opportunities, one of the more demanding requirements.

Praveen Tekchandani, Asean co-leader and Singapore leader, climate change and sustainability services at EY believes the first reports have been encouraging, particularly among the larger listed companies, though their depth still varies.

“The focus is shifting from mere disclosure of climate-related information to the quality of the governance, methodologies, data and controls supporting those disclosures,” he said.

Not every company has made that shift, according to Eric Ricaurte, chief executive of Greenview, a consultancy that measures emissions for hotel companies. 

When new disclosures become mandatory, many companies hand the work to their auditor or do the minimum, Ricaurte argued, adding that regulation should not push companies into “a shiny report that no one reads anyway”.

For practitioners, the larger concern is the disconnect between reporting on climate risk and acting on it.

Cherine Fok, Partner, Sustainability Consulting, KPMG in Singapore, said many larger listed companies have established governance structures, identified climate risks and built emissions-reporting capabilities, but have been slower to connect those risks to strategy, financial planning and capital allocation.

“Companies are strongest on the foundations,” said Fok, “They are weakest at connecting climate risks and opportunities to strategy, financial planning and capital allocation.”

The obstacle, she added, is that climate-risk assessment and financial planning have traditionally been handled by different teams, using different methods, assumptions and time horizons.

“The real test is whether climate considerations are changing how the business is governed, planned and managed, not simply how comprehensive the report appears,” said Fok.

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The real test is whether climate considerations are changing how the business is governed, planned and managed, not simply how comprehensive the report appears.

Cherine Fok, Partner, Sustainability Consulting, KPMG Singapore

ComfortDelGro, a listed transport operator that is not on the STI and faces lighter requirements, has gone further than it needs to, estimating 10 categories of value chain, or Scope 3, emissions that it was not required to report. 

“The calculation of our Scope 3 emissions allowed us to have a more comprehensive view of our carbon impact and assess areas of action,” said Jonathan Jong, group chief sustainability officer at ComfortDelGro. The company’s finance team also supplied current and estimated spending on electric vehicles and depot electrification for its latest report.

Even so, ComfortDelGro has found some aspects of the financial effects of climate risks hard to measure in depth, because some of its decarbonisation happens through routine fleet renewals.

“Such fleet renewals may bring out benefits beyond climate-related ones, for example, improved safety, passenger comfort, or cost efficiencies, and it may be a challenge to disaggregate the financial impact due to climate-related risk and opportunities from commercial business decisions,” Jong added.

Eco-Business contacted several other STI companies for this article, but none provided comments by press time.

Demands for clearer rules 

The proposed statement of compliance would affect every company reviewed, according to experts, most of whom agree it is a step in the right direction.

“A formal statement of compliance would increase accountability and reinforce that climate disclosures are a governance matter, not just the sustainability team’s responsibility,” Fok said.

She added, however, it should not become the sole measure of reporting quality, since companies are at different stages of maturity. 

Both EY and ComfortDelGro want clearer guidance on what companies would need to demonstrate before declaring full compliance with the climate standard, including how to handle provisions that allow judgement.

The proposed statement would cover the entire standard from FY2028, including disclosures on strategy, risk management and financial effects. Mandatory assurance, however, would begin a year later and cover only Scope 1 and 2 emissions, leaving boards to establish how to substantiate compliance with the remaining requirements.

EY’s Tekchandani said boards would need either external assurance covering the full standard – an ambitious prospect in the short term, in his view – or internal controls robust enough to support the declaration. He would like to see guidance and examples from regulators on the use of reliefs and permitted omissions. 

“The objective should not be to lower the compliance threshold, but to provide greater clarity on its practical application,” he said.

ComfortDelGro, which has been progressively aligning its reporting with the standards, has found that the proposal had so far had minimal effect on its processes. But ComfortDelGro’s Jong also sought a clearer definition of compliance and an explanation of the implications of making the statement.

For companies, the immediate task is to strengthen the systems underpinning their disclosures. In Tekchandani’s view, they should use the period before mandatory assurance to improve methodologies, documentation, review processes and internal controls.

More time needed to get the data right

Companies will need time to improve the data underpinning their disclosures, according to experts.

Greenview’s Ricaurte estimates that bringing sustainability data into good order takes about three years, while Fok expects larger listed companies to make meaningful progress in reporting financial effects within two to three reporting cycles.

The difficulties start with basic energy records. Invoices can straddle two months, meter readings may be missed, and companies with properties across the region may struggle to identify every energy source at each site, Ricaurte said.

“Sustainability data is inherently messy,” he added.

Those gaps could make publishing sustainability reports alongside financial statements difficult.

KPMG’s Fok sees a potential benefit in aligning the deadlines: closer coordination between the teams responsible for financial and sustainability reporting.

“This is an opportunity to rethink how finance and sustainability work together, not simply an additional reporting burden,” she said.

Scope 3 remains a tough nut to crack

In hotels, according to Ricaurte, energy is central to the business, so Scope 1 and 2 figures carry commercial weight; the harder task is accounting for the emissions behind everything a hotel buys, which fall under Scope 3.

Non-profit disclosure platform CDP estimates that supply-chain emissions are, on average, 26 times those from a company’s own operations, yet the information needed to calculate them sits with suppliers and contractors.

According to Fok, this is a particular problem for Singapore, as a regional hub whose companies rely on suppliers across Asean, many of them small and medium-sized enterprises.

ComfortDelGro, which has published a Scope 3 inventory since its FY2021 report, has had to gather new data and keep refining its methods.

“The calculation of Scope 3 categories required the opening up of various data points,” Jong said. Supplier data can themselves be estimates; waste collectors, for instance, estimate tonnage per collection rather than provide actual figures, according to the company.

Hotels also face a problem of scale. Accrording to Ricaurte, a single property can buy from up to 1,200 spending categories under the industry’s accounting framework, each needing its own emission factor, and the quality of data across a regional portfolio varies with each property’s location.

Spend-based estimates, which convert procurement spending into emissions, are the usual shortcut, but Ricaurte considers them of limited use for cutting emissions.

“The only way you can reduce that is to reduce your spend,” he said.

Greenview instead focuses on the purchases that account for most of a hotel’s emissions and that it can act on, even though that sits uneasily with carbon accounting’s emphasis on completeness. 

That leaves regulators balancing two aims: capturing what is, for most companies, their largest source of emissions, without forcing them to publish figures built largely on estimates.

STI companies must report Scope 3 from FY2026, and the proposed changes would give other companies ongoing relief until Singapore’s roadmap brings them in.

Elsewhere, Australia has given companies a temporary shield from private lawsuits over Scope 3 disclosures, and Hong Kong asks companies to explain their gaps.

Tekchandani considers Singapore’s proposed approach sufficient for now.

“Singapore’s proposed approach already gives companies significant flexibility on Scope 3,” he said. He would consider a targeted, time-bound safe harbour only once Scope 3 becomes mandatory for more companies.

Fok would go further, asking companies to explain their data gaps, estimation methods and plans to improve. “This encourages ownership without making relief indefinite,” she said.

Jong would like more industry-specific guidance, through channels such as NetZeroHub, a Singapore Business Federation platform that provides local emission factors to help companies calculate their emissions.

Moving from reporting to decision-making

With the consultation now closed, the Interim Sustainability Standards Committee will consider the feedback before the final standards are issued, and the legislation that gives them force is still to come; listed companies would then have two further reporting cycles before their first statements of compliance are due.

“Companies already make strategic and investment decisions under uncertainty and should not wait for perfect information,” Fok said. The breakthrough, she added, “will come when climate-related financial analysis becomes part of normal business planning rather than a separate reporting exercise”.

Asked what she would most like to change before the standards are finalised, Fok said: “I would like the final standards and guidance to put more weight on how climate considerations are embedded in decision-making, not just what is disclosed.”