78% of Singapore’s large listed companies advance in climate reporting

Nearly all companies have established roles or committees to manage climate risks and opportunities.

About 78 % of larger listed companies, mostly from carbon-intensive sectors, are progressing well in climate reporting, according to a joint study conducted by the Accounting and Corporate Regulatory Authority (ACRA) and the Sustainable and Green Finance Institute (SGFIN) at the National University of Singapore.

The study, based on the Task Force on Climate-related Financial Disclosures (TCFD) framework, highlights both progress and areas for improvement in climate-related disclosures.

Key findings showed that nearly all companies (94%) have established roles or committees to manage climate risks and opportunities, although only 75% fully describe board involvement in shaping climate-related goals.

Regarding strategy, a majority (88%) disclose climate risks, but fewer (61%) disclose opportunities. Whilst 75% conduct scenario analyses on climate impacts, only 16% integrate climate risks into financial planning.

In risk management, over two-thirds (71%) disclose methods for identifying and managing climate risks. However, only 24% fully disclose the significance of climate risks compared to other risks, and just 10% explain their potential impact.

Companies perform well in disclosing Scope 1 (96%) and Scope 2 (100%) greenhouse gas emissions, with notable progress in Scope 3 (59%). Most (80%) have set emissions reduction targets, yet few disclose interim milestones or link executive pay to climate performance.

The initiative aligns with Singapore’s commitment to sustainable development, as outlined by Second Minister for Finance Chee Hong Tat.

Starting from the financial year 2025, listed issuers will be required to report using International Sustainability Standards Board (ISSB)-aligned requirements. Larger non-listed companies will follow suit from financial year 2027, with certain exceptions. Companies aligned with the TCFD Framework are expected to seamlessly transition into ISSB-aligned reporting.

The study assessed climate-related disclosures of 51 larger listed issuers for the financial year 2022, emphasizing governance, strategy, risk management, and metrics/targets. While most companies demonstrate robust governance structures and risk management practices, improvements are needed in disclosing strategic alignment with climate goals and scenario analysis methodologies.

To support companies in meeting these new requirements, several initiatives have been launched, including the Sustainability Reporting Grant by the Singapore Economic Development Board and Enterprise Singapore, aimed at assisting companies in producing their first sustainability report. Additionally, the Green Skills Committee, established by the Ministry of Trade and Industry and SkillsFuture Singapore, will develop training programs to enhance sustainable reporting capabilities.

Moreover, the Infocomm Media Development Authority (IMDA) has introduced digital sustainability solutions under the Advanced Digital Solutions scheme to aid enterprises in managing emissions and improving sustainability reporting.