Singapore has announced a delay in mandatory International Sustainability Standards Board (ISSB)-aligned climate reporting for most listed firms by up to five years, in a move that risks undermining its reputation as an early mover in the region.
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While all Singapore-listed firms were initially required to start making climate disclosures by 2025, under the revised rules, non-Straits Times Index (STI) issuers with a market capitalisation of S$1 billion (US$780 million) and above will only be required to comply from 2028, while those with under S$1 billion market capitalisation will be expected to follow from 2030.
Over 550 listed companies – over 90 per cent of firms listed on the Singapore Exchange (SGX) – will be affected by the delay.
Singapore’s revised rules now puts the city-state – which was among the first in Asia to propose mandatory ISSB-aligned reporting for companies in 2023 – behind Malaysia in mandatory sustainability reporting requirements. Listed and large non-listed firms in the neighbouring Southeast Asian nation are expected to start ISSB-aligned reporting, including on Scope 3 emissions, by 2027.
While reporting Scope 3 emissions remains mandatory for STI constituents – the largest SGX-listed issuers – by 2026, it will become voluntary until further notice for other listed issuers.
As of 30 June, the STI consists of 27 companies, including all three Singapore banks DBS, OCBC and UOB, as well as real estate giants like CapitaLand Investment and CDL.
Scope 3 emissions, or full value chain emissions, represents the largest source of emissions for companies. Larger firms heavily rely on the data from suppliers or investees, often smaller in size, to accurately report on their Scope 3 emissions.
All SGX-listed issuers are still expected to start reporting on their Scope 1 and 2 emissions – their direct and indirect emissions from the consumption of purchased electricity, respectively – by 2025. However, external limited assurance for these reported emissions has been deferred by two years to 2029.
The timeline revision comes after calls by the Singapore Business Federation (SBF), a group representing the interests of Singaporean businesses, for a one- to two-year extension for smaller listed companies to comply with the mandatory reporting rules in June, following engagements with close to 40 companies.
In a joint press release by the Accounting and Corporate Regulatory Authority (ACRA) and SGX Regulation (SGX RegCo), the regulatory agencies cited economic uncertainty and readiness gaps among smaller firms for the delay. The aim of the extension is to give these issuers time to build up data collection processes and learn from larger companies that have already embarked on ISSB-aligned climate reporting.
“During the interim period up to the various mandatory start-dates, SGX RegCo expects issuers to build on their existing climate reporting disclosures and to demonstrate progress towards incorporating the climate-relevant provisions in the ISSB standards,” an SGX RegoCo spokesperson told Eco-Business. “The end-goal is for companies to produce quality and accurate reports.”
Some challenges that companies have identified include disclosures on climate scenario analysis as well as current and anticipated financial effects of climate change, the spokesperson added.
Chia-Tern Huey Min, ACRA’s chief executive, stated that the latest approach “reflects our commitment to supporting companies through current challenges while maintaining Singapore’s momentum in climate action paving the way for more meaningful and higher quality climate-related disclosures in the long run.”
‘Deprioritisation of the sustainability agenda’
While experts say that a delay in implementing ISSB standards is unsurprising, the length of it was unexpected and risks leading other countries in the region to reconsider their own timelines.
“Mandatory reporting under the ISSB rules is a massive exercise for any company, and the burden on smaller less resourced businesses should not be underestimated,” Charlie Knaggs, decarbonisation partner at sustainability consultancy ERM, told Eco-Business. “Notwithstanding, the length of the delay does indicate a deprioritisation of the sustainability agenda by the relevant agencies.”
“The delay does seem to provide an excuse for other countries to ease their reporting requirements – particularly when viewed in the context of the recent easing of the Corporate Sustainability Reporting Directive (CSRD) requirements in the European Union,” said Knaggs.
Given that mandatory ISSB-aligned reporting rules are meant to help financiers manage climate-related risks, “delaying the requirements does contribute to an increasing risk profile across the financial system,” he added.
Lawrence Loh, director for governance and sustainability at the National University of Singapore Business School, told Eco-Business that given that other countries in the region are “in more dire straits” than Singapore due to the United States’ tariffs, the republic’s decision may prompt a readjustment of their own ISSB adoption timelines.
“Nothing is fixed. Even countries like Malaysia, or even Australia and New Zealand, might look towards reviewing [their timelines], because they are also facing the same problems as us. In fact, for all these countries, their US tariffs are higher than Singapore’s,” said Loh.
In response to Eco-Business queries, an IFRS Foundation spokesperson said that following Singapore’s revised rules, it will be liaising with the relevant Singapore authorities to update the country’s jurisdictional profile, which it published for the first time in June as part of efforts to track progress on the global adoption of ISSB rules, which the non-profit oversees.
A Singapore-based sustainability professional formerly with one of the relevant regulatory authorities, who declined to be named, said that regionally, the republic’s decision is “sure to be fuel for the sustainability deprioritisation fire.”
“I believe we’re entering an era where these switcheroos on sustainability-related regulatory timelines will happen more frequently,” especially against the backdrop of the EU’s backpedalling on sustainability policies, including the CSRD, Corporate Sustainability Due Diligence Directive (CSDDD) and EU Deforestation-free Regulation (EUDR), he said.
The “last-minute, haphazard manner” in which Singapore’s decision was delivered risks eroding confidence in regulatory efficiency, he added.
More clarity needed in next five years
Industry players said it remains unclear what Singapore’s five-year delay for the majority of listed issuers is meant to achieve.
Using the time to simplify reporting rules and improve disclosure quality, as the EU is attempting with its Omnibus package, could make the delay worthwhile, said Benjamin Soh, co-founder and managing director of ESGpedia, a Singapore-based sustainability reporting platform.
Last year, Singapore rolled out a sustainability reporting grant to offset up to a third of the costs of manpower training and consultancy services for companies developing their first ISSB-aligned reports. But Enterprise Singapore, one of the government agencies administering the grant, did not disclose its take-up rate thus far to Eco-Business, calling it “a relatively new scheme.”
Soh noted that the delay is unlikely to reduce the demand for carbon accounting services that platforms like ESGpedia offer. “I don’t think any of us are narrowly focused on ISSB-aligned climate disclosures. The role of a carbon accounting platform is to streamline data all in one place, because businesses will have to calculate their emissions either way, even without ISSB implementation, for procurement, clients or tenders.”
