Singapore's corporate climate disclosure push accelerates with focus on smaller firms’ readiness

Singapore is progressing steadily towards mandatory climate-related disclosures for its corporate sector, with the financial year 2025 marking a significant milestone. From that point, all listed companies will be required to report their Scope 1 and Scope 2 greenhouse gas emissions, encompassing direct and indirect emissions respectively. This move reflects the nation’s commitment to sustainability and aligns with global shifts towards enhanced environmental accountability.

A recent study conducted by the Institute of Singapore Chartered Accountants (ISCA), PwC, and SGX RegCo offers a detailed assessment of the preparedness of local companies in meeting these new regulatory standards. According to the study, companies listed on the Straits Times Index (STI) are generally well-equipped for the mandatory reporting regime. Given that these firms are the largest and best-resourced, many have already established internal audit teams for sustainability matters, and 57% have obtained external assurance over their sustainability disclosures. They have also introduced environmental, social, and governance (ESG) training programmes aimed at embedding climate reporting skills and integrating ESG considerations into their business strategies and operational processes.

On the other hand, non-STI listed companies, especially smaller firms, face noticeable challenges. The report highlights that larger non-STI companies with market capitalisation exceeding S$1 billion have until 2028 to comply, while smaller non-STI companies have a deadline set for 2030. However, only 29% of the larger non-STI firms have secured external assurance, and this figure drops to just 7% for smaller firms. A significant portion of smaller companies are also hampered by an absence of structured internal audit functions, three in four reported lacking such teams, and rely heavily on manual data collection methods like spreadsheets. These practices reduce the frequency and reliability of data collection, underscoring systemic capacity constraints.

The study stresses the urgency of early preparations for all companies, especially non-STI firms, to adopt more robust internal processes before the deadlines. It recommends a more systematic approach to developing sustainability reporting capabilities and training, pointing out that smaller firms often neglect capacity-building efforts or find existing training inadequate.

To assist companies in this transition, ISCA’s Sustainability and Climate Change Committee, together with SGX RegCo, introduced a structured guide designed to help non-STI companies strengthen their reporting systems incrementally. Alongside this, ISCA has also published Social Impact Metrics for Corporate Sustainability Reporting, signalling a broader focus beyond environmental factors to include social dimensions within ESG frameworks.

Notably, regulatory authorities have provided clear timelines for progressive implementation. The Accounting and Corporate Regulatory Authority (ACRA) and SGX RegCo’s climate reporting and assurance roadmap specifies that while reporting of Scope 1 and 2 emissions is mandatory from FY2025 for listed issuers, Scope 3 emission reporting, which covers emissions indirectly related to a company’s activities, will commence from FY2026 for STI constituents. For large non-listed companies, reporting starts from FY2027, with external limited assurance requirements deferred until FY2029. Extensions to these timelines were announced in August 2025, providing companies additional time to build the necessary capabilities without compromising the rigor of disclosures.

Industry commentary, such as that highlighted by PwC, reinforces these findings. Their research indicates that while leading companies are relatively prepared for sustainability assurance, a significant portion of the market remains behind in readiness. Over 80% of STI constituents and large non-STI companies have either conducted or are considering assurance readiness assessments, but broader industry uptake remains slow.

The mandate also coincides with SGX RegCo’s decision to incorporate the latest standards developed by the International Sustainability Standards Board (ISSB), reflecting a global benchmarking approach to sustainability disclosures. This enhances the comparability and credibility of Singapore-listed companies’ climate reporting in international markets.

Ultimately, the reporting requirements are positioned not merely as a regulatory burden but as an opportunity for companies to enhance their resilience and competitive positioning amid rising climate risks in Southeast Asia. With the region experiencing increasing temperatures and more intense tropical storms, firms that proactively embrace comprehensive and assured climate disclosures can improve their reputations and long-term market value.

In sum, while Singapore’s top-listed companies appear largely ready to comply with the enhanced climate reporting mandate, smaller firms face considerable structural and capacity barriers. The regulatory authorities’ phased approach and supportive tools aim to bridge these gaps, encouraging a more inclusive and resilient transition towards robust climate risk disclosure across the corporate landscape.