A skills shortage, data deficit and high implementation costs are slowing the adoption of climate reporting standards among Singapore Exchange (SGX)-listed companies, even as many begin to identify business opportunities through climate action, according to a study published on Friday.
The research by Schneider Electric, supported by Singapore Exchange Regulation (SGX RegCo), found that internal skills gaps are the biggest barrier to adopting the International Sustainability Standards Board’s (ISSB) Sustainability Disclosure Standards, cited by 55 per cent of business leaders surveyed.
High costs (52 per cent), data gaps (43 per cent) and a lack of expertise among external service providers (42 per cent) were also flagged as major challenges.
The findings emerge five months after Singapore delayed mandatory climate disclosures for most listed companies by five years, citing an industry “readiness gap” as it pushed reporting deadlines back as late as 2030 from 2025 previously.
Internal skills gap is the biggest challenge facing disclosing companies in Singapore. Source: Schneider Electric/SGX
The research was based on a survey of 543 business executives in Singapore with a sustainability remit, 76 per cent of them working for SGX-listed firms. Singapore’s listed heavyweights include DBS Bank, real estate firm CapitaLand, conglomerate Jardine Matheson, and palm oil giant Wilmar International.
Despite the obstacles identified, more than 90 per cent of respondents said they have started work to adopt the ISSB standards.
Six in 10 respondents said their organisations have identified new business opportunities in response to climate change, with some creating new business segments as a result.
More than half said they are pursuing partnerships or mergers and acquisitions with climate-focused companies to build expertise and continue to seek new opportunities in the climate space.
Opportunity areas identified were renewable energy, climate and digital technologies, infrastructure and urban planning, as well as green finance.
Digital tools are increasingly being used to improve sustainability reporting. While about half of respondents said they are integrating digital technologies – such as embedding digital tagging into financial reporting systems – 7 per cent said they don’t use any digital tools for reporting.
Investment patterns also reflect a narrow focus, with most companies prioritising physical infrastructure such as solar panels and battery energy storage systems to mitigate climate risk.
“Our study shows that while businesses recognise the strategic value of standards, many are constrained by capability and data limitations,” said Yoon Young Kim, cluster president for Singapore and Brunei at Schneider Electric.
The report’s authors pointed to a study of European companies that found that early adopters of climate disclosure standards were able to build stronger internal systems, improve data quality, and signal transparency and long-term strategic thinking to investors. Firms that reported only when mandated were more likely to provide boilerplate disclosures and face a “negative cost-benefit trade-off”.
The highest reported levels of disclosures in Schneider Electric’s study of Singapore firms are for climate-related metrics and targets, at 71 per cent, followed by social factors (63 per cent), governance (54 per cent) and nature (53 per cent).
