Singapore Exchange Regulation (SGX RegCo) is consulting the market on details of how the International Sustainability Standards Board (ISSB) standards are to be incorporated into its sustainability reporting rules for climate-related disclosures.
This is in line with the Sustainability Reporting Advisory Committee’s recommendations, which were announced on Feb 28.
In a March 7 statement, SGX RegCo says it is also seeking feedback on a proposal to turn “primary components” of a sustainability report from the current “comply or explain” basis to a mandatory basis.
These primary components include sustainability targets, material environmental, social and governance (ESG) factors and climate-related disclosures that are consistent with the Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations, among others.
Among others, SGX RegCo proposes that its listing rules be amended to include more comprehensive disclosures.
From FY2025, issuers should refer to both ISSB’s IFRS S1 and IFRS S2 standards in preparing climate-related disclosures, including any permanent or temporary reliefs.
See also: Large private companies must report annual climate-related disclosures from FY2027: Acra, SGX RegCo
Issuers should also disclose Scope 1 and Scope 2 greenhouse gas (GHG) emissions and the measurement approach from FY2025, before disclosing “applicable categories” of Scope 3 GHG emissions from FY2026.
In addition, issuers should disclose industry-based metrics and cross-industry metric categories relevant for climate-related disclosures, and the sustainability report should be issued according to current timelines in FY2025.
Finally, SGX RegCo proposes that from FY2026, the sustainability report should be issued together with the annual report.
See also: ISSB standards 'best chance we have' at consistent sustainability reporting: SGX RegCo
Sustainability reporting was introduced to SGX-listed issuers on a voluntary basis in 2011. It was made mandatory in 2016, but with description of the primary components on a “comply or explain” basis.
Climate reporting based on the recommendations of the TCFD was mandated for FY2022 on a “comply or explain” basis for all issuers.
Since FY2023, listed issuers in the financial, energy and agriculture, food and forestry products industries have been required to provide climate-related disclosures aligned with the TCFD recommendations.
SGX-listed issuers have improved their sustainability reporting over the years, says Tan Boon Gin, chief executive officer of SGX RegCo.
“Most already undertake climate-related disclosures based on the TCFD recommendations. The ISSB Standards have since been launched globally to meet demand for more consistent and comparable disclosures. We want to help issuers report based on these new standards so that they are ready for a low-carbon future.”
Lim Tuang Lee, assistant managing director (capital markets), Monetary Authority of Singapore (MAS), says: “MAS is supportive of Singapore Exchange S68 ’s move to incorporate ISSB standards into the disclosure requirements for listed companies in Singapore. This is in line with the drive towards consistent and comparable disclosures across jurisdictions to catalyse the global net-zero transition.”
The consultation is open till April 5 and the consultation paper is available on SGX RegCo’s website.
