Singapore moves forward with ISSB standards, despite scope 3 delay

Singapore Exchange Regulation (SGX RegCo) is set to apply the latest international sustainability standards to listed companies, after the plan received “broad support” in a public consultation.

From the 2025 financial year onwards, Singapore-listed companies must report their scope 1 and scope 2 greenhouse gas emissions – those resulting directly from the reporting firms’ activities, and those linked to the energy they have purchased.

Companies will also have to start following the climate-related requirements issued by the International Sustainability Standards Board (ISSB) when making their climate-related disclosures.

However, the ISSB had already given companies an extra year to start reporting scope 3 emissions – those produced along the entire value chain – and SGX RegCo signalled that it is likely to delay this requirement for smaller Singapore-listed companies even longer.

“Most respondents to the consultation supported the move for all issuers to carry out mandatory climate-related reporting versus the current requirement for only certain sectors to do so,” SGX RegCo, a subsidiary of the Singapore Exchange, said in a statement.

“But they also highlighted challenges, particularly for smaller issuers, in relation to the evolving measurement and reporting methodologies for Scope 3 [greenhouse gas] emissions,” the statement added.

“SGX RegCo will therefore review issuers’ experience and readiness before establishing the implementation roadmap for reporting Scope 3 GHG emissions. The current plan is to prioritise larger issuers by market capitalisation with the intention that they report Scope 3 GHG emissions from FY 2026.”

Scope 3 reporting is proving to be a particularly tricky aspect of the disclosure regimes emerging around the world.

Climate activists argue that scope 3 disclosures are crucial to understanding companies’ true impact on the environment, as these emissions usually make up the vast majority of a firm’s carbon footprint. However, they are significantly harder to calculate than scope 1 and 2 emissions, as companies have only limited information about what is happening up and down their value chains.

In the US, where the Securities and Exchange Commission has been forced to suspend the implementation of its disclosure rules due to a slew of lawsuits, scope 3 reporting was ultimately dropped.

A report by the Singapore Institute of Chartered Accountants, released in July in collaboration with energy company Schneider Electric, found a lack of knowledge and understanding of scope 3 to be a major issue among Singaporean company managers.

However, Png Chin Yee, chief financial officer of state-owned investment firm Temasek, said change would have to come eventually. “Addressing Scope 3 emissions is critical for all stakeholders to move the economy towards net zero,” she told The Straits Times.

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