The Institute of Singapore Chartered Accountants (ISCA) has launched a mock sustainability report as a guide to help Singapore’s listed companies adopt mandatory climate-related disclosures. This comes as all listed issuers will be required to report and file annual climate-related disclosures from FY2025 using requirements aligned with the International Sustainability Standards Board (ISSB) standards.
Launched on Oct 7, ISCA’s Illustrative Sustainability Report: Based on the GRI Standards and IFRS Sustainability Disclosure Standards, was developed with support from the Singapore Exchange S68 Regulation (SGX RegCo).
It aims to “provide clarity” to firms that are already reporting under the Global Reporting Initiative (GRI) standards on how also to adopt the ISSB’s standards.
The 62-page document is based on a hypothetical listed entity operating in the real estate industry in Singapore with a mix of commercial and retail properties. The mock sustainability report also includes “section context” and “guidance notes” at the foot of each chapter, which explain the rationale behind certain reporting requirements and recommended steps.
The mock report is prepared in accordance with GRI standards, which the report says is highly aligned with IFRS S2, one of the two inaugural standards issued by the ISSB in June 2023. “Entities that already disclose Scope 1, Scope 2 and Scope 3 emissions using GRI 305 are well-positioned to disclose these emissions in accordance with IFRS S2,” reads ISCA’s mock report. GRI 305 addresses emissions into the air.
With the aim of aligning sustainability-related disclosures in capital markets worldwide, IFRS S1 sets out the overall requirements for a reporting entity to disclose sustainability-related financial information about its sustainability-related risks and opportunities, while IFRS S2 requires an entity to disclose information about its climate-related risks and opportunities.
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In March, SGX RegCo consulted the market on details of how the ISSB standards are to be incorporated into its sustainability reporting rules for climate-related disclosures. In September, SGX RegCo announced that all listed companies must adopt ISSB standards from FY2025.
However, the regulator also flagged challenges, especially for smaller issuers, such as the evolving measurements and reporting methodologies for the disclosure of Scope 3 emissions. Measuring Scope 3 allows firms to understand and map their value chain, calculating the emissions arising from activities such as purchased goods and services, capital goods, franchises, business travel and employee commuting.
Hence, SGX RegCo will review issuers’ experiences and their readiness before establishing the implementation roadmap for reporting Scope 3 emissions. This does not factor in the one-year transition relief for Scope 3 emissions disclosures, which is already built into the IFRS sustainability disclosure standards.
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ISCA’s report explains these transition reliefs in detail over four pages. It highlights key reliefs, as well as proportionality and application mechanisms offered by ISSB, to address practical challenges businesses may face when applying these standards.
For example, the reporting entity is not required to disclose its Scope 3 emissions and its comparative information in the first annual reporting period when it applies IFRS S2. Proportionality is another relief mechanism, which allows firms to temporarily “use all reasonable and supportable information that is available to the entity at the reporting date without undue cost or effort”.
SGX RegCo CEO Tan Boon Gin says many companies have requested guidance on issuing climate-related disclosures that meet the bourse’s coming standards. “This guide does exactly that, by illustrating how companies can take a phased approach to the adoption of the IFRS S1 and S2, alongside GRI, which is widely used, and avail themselves of the reliefs where needed.”
Private companies may also be interested in ISCA’s report. Large non-listed companies will be required to report and file climate-related disclosures from FY2027 onwards, as announced by the Accounting and Corporate Regulatory Authority (Acra) in February. These are firms with annual revenue of at least $1 billion and total assets of at least $500 million in Singapore.
Acra CEO Chia-Tern Huey Min says: “As Singapore strengthens its position as a global business hub, it is essential for corporate practices to align sustainability reporting with international standards. Capacity-building initiatives such as this guide will provide support for both listed and large non-listed companies as they prepare for the upcoming climate reporting requirements.”
The illustrative sustainability report can be viewed online at www.isca.org.sg/standards-guidance/sustainability-and-climate-change/ thought-leadership/illustrative-sustainability-report.
Read more about how Singapore is adopting the ISSB standards:
- SGX RegCo will require ISSB-aligned climate-related disclosures from all listed issuers starting FY2025 (September)
- ‘Huge momentum’ in Asia for ISSB adoption, says vice-chair of climate reporting standards body (September)
- SGX RegCo launches consultation on incorporating ISSB standards into sustainability reporting rules (March)
- Large private companies must report annual climate-related disclosures from FY2027: Acra, SGX RegCo (February)
- SGX RegCo to seek feedback by year-end on mandating ISSB-aligned climate reporting (September 2023)
- ISSB standards 'best chance we have' at consistent sustainability reporting: SGX RegCo (July 2023)
- ISSB issues inaugural standards, creating common language for climate-related impact on companies (June 2023)
