The Accounting and Corporate Regulatory Authority and Singapore Exchange Regulation have provided details of mandatory climate reporting for listed issuers and large non-listed companies.
By Paul A. Davies, Farhana Sharmeen, Michael D. Green, James Bee, and Kevin Mak
On 28 February 2024, the Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation (SGX RegCo) introduced regulations for mandatory climate-related disclosures (CRD) (the Regulations). The Regulations will be introduced in a phased approach in line with the recommendations from the Sustainability Reporting Advisory Committee (SRAC).
Pursuant to the Regulations, all listed issuers will be required to:[i]
- From FY2025, report and file annual CRD, using requirements aligned with the International Sustainability Standards Board (ISSB) standards
- From FY2026, report Scope 3 greenhouse gas (GHG) emissions
- From FY2027, conduct external limited assurance on their Scope 1 and 2 GHG emissions
Large non-listed companies will also be subject to requirements under the Regulations, in particular::[ii]
- From FY2027, to report and file annual CRD
- From FY2029, to conduct external limited assurance on their Scope 1 and 2 GHG emissions
Exemptions for Large Non-listed Companies From Reporting CRD
Under the Regulations, large non-listed companies with parent companies that are reporting CRD would be exempted from publishing their own CRD reports under the following circumstances:
- its immediate, intermediate, or ultimate parent (local or foreign) has prepared climate or sustainability reports in accordance with prescribed CRD in Singapore or deemed equivalent; (e.g. European Sustainability Reporting Standards) as determined by ACRA and
- its activities are included in that parent’s report, which is available for public use.
In addition, from FY2027 to FY2029 only (both years inclusive), large non-listed companies whose parent companies are reporting CRD using other international standards and frameworks as determined by ACRA (e.g., Task Force on Climate-related Financial Disclosures recommendations and Global Reporting Initiative Standards etc.) are exempted from mandatory reporting using the local reporting standards. ACRA will issue guidance on the standards and frameworks that will be accepted during the transitional period to guide implementation.
Further details on the exemption pathways will be discussed during the Companies Act 1967 Bill consultation.
Next Steps
SGX RegCo will conduct a public consultation on the detailed listing rule amendments to implement the aspects of the recommendations relating to listed issuers, including on requiring CRD based on the ISSB standards from FY2025. In addition, a review will be conducted by ACRA around 2027 to consider if mandatory CRD should be extended to other non-listed companies.
Latham & Watkins will continue to monitor developments in this area.
[i] Issuers of equity securities listed on Singapore Exchange Securities Trading Limited, comprising Singapore-incorporated and foreign-incorporated companies, business trusts, investment funds (excluding exchange traded funds), and real estate investment trusts.
[ii] Non-listed companies defined as those with annual revenue of at least S$1 billion and total assets of at least S$500 million.