- 87% of issuers have described climate-related risks and opportunities in their FY 2023 report, a slight increase from 80% that did so last year
- 21% have committed to net-zero greenhouse gas emissions, of which 32% have embarked on climate-related transition plans
- More issuers are seeking external assurance on their climate-related data
Two years since the Singapore Exchange (SGX) mandated all local issuers to report on climate-related disclosures on a “comply or explain” basis, 346 Singapore-listed companies have commenced on their climate-related reporting for financial year (FY) ended on 31 December 2023. This translates to 96% of the 362 issuers. Compared to the 240 companies that did so last year (65% of 370 issuers), this represents a 44% increase.
For issuers in industries slated for FY 2023 mandatory reporting (i.e., agriculture, food and forest products, energy and financial), nearly 100% have provided some form of climate-related disclosures. Even for non-mandated industries, there was also a significant improvement – from 56% in FY 2022 to 93% in FY 2023.
This is according to a study, Transparency in focus: State of Climate Reporting in Singapore, by professional services organization, Ernst & Young LLP (EY) and supported by global accountancy body, CPA Australia.
The study, currently in its second edition, aims to provide insights into the current state of climate reporting in Singapore, after the SGX required Singapore-listed companies to include such information in their sustainability reports from FY 2022 based on recommendations by the Task Force on Climate-related Financial Disclosures (TCFD). The study analyzed data from 362 Singapore-listed companies with financial year-end on 31 December 2023, and whose sustainability reports were published by 31 May 20241.
Ken Ong, Partner, Assurance at Ernst & Young LLP says:
“Robust climate-related disclosures are vital for investors, customers and the broader business community, so they can make informed decisions that contribute to a sustainable future. A good and transparent disclosure not only contributes to investor trust and a lower cost of capital for responsible businesses, it also enables investors to identify companies that are well-positioned for long-term value creation. Importantly, the collective efforts on reporting are vital so that businesses align their practices with global climate goals to combat climate change and promote a resilient global economy.”
More issuers are disclosing climate-related risks and opportunities
The study found that more issuers are disclosing climate-related risks and opportunities this year – 87% have described climate-related risks and opportunities in their FY 2023 report, a slight increase from 80% that did so last year. For those that are in the FY 2023 mandated industries, more than 95% have done so, up from 77% in FY 2022.
In terms of climate-related opportunities, 65% of issuers have disclosed in this year’s reports, up from 47% last year. The study also revealed that 21% of issuers have committed to net-zero greenhouse gas emissions, of which 32% have embarked on disclosures of their transition plans.
In March 2024, the SGX RegCo issued a public consultation paper on how the International Sustainability Standards Board (ISSB) standards are to be incorporated into its sustainability reporting rules for climate-related disclosures. It was proposed that all SGX-listed issuers will provide climate-related disclosures aligned with the ISSB standards from FY 2025. The ISSB standards include IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. The IFRS S2 is consistent the four core recommendations and 11 recommended disclosures published by the TCFD.
Ms. Nhan Quang, Partner, Climate Change and Sustainability Services at Ernst & Young LLP says:
“A core tenet of the IFRS S2 is the requirement for companies to assess climate-related risks and develop and publish a transition plan that aligns with their strategy. While it’s heartening to see that some issuers are making efforts to cite their transition plans, it needs to go beyond broad-based statements to include an implementation plan with timebound actions that are linked to interim targets and metrics to monitor progress, as well as any capital deployments required to realize that plan.
“While we are glad to see encouraging year-on-year improvements in climate-related disclosures among SGX-listed companies, more needs to be done – and done quickly – to stay ahead of proposed ISSB-aligned climate disclosures requirement in SGX RegCo’s public consultation paper.”
The study also found that more issuers are seeking external assurance on their climate-related data – from 23 that did so in FY 2022 to 38 in FY 2023.
Ong says:
“The uptake in external assurance reflects a growing commitment to credible sustainability disclosures and in bolstering stakeholders’ confidence in the data disclosed.”
Chng Lay Chew, a councillor of CPA Australia’s Singapore Division and a member of its ESG Committee, adds:
“The progress in climate-related disclosures is commendable and reflects the commitment of SGX-listed companies to sustainability and transparency. As companies make the transition toward the ISSB-aligned climate disclosures, it is imperative for issuers to enhance the depth and quality of their reporting. With continuous improvements and enhanced disclosures, companies in Singapore will be able to better align themselves with global best practices, foster investor trust and ultimately, play a pivotal role in contributing to a sustainable economy.”
The report suggests three core actions for companies to accelerate their climate reporting journey:
Ong concludes:
“The tone from the top is an important driver for many strategic developments for organizations. To further advance their sustainability journey, boards and C-suites need to work more closely together to drive change throughout the enterprise, ensuring that teams collaborate more effectively and cohesively to obtain and uphold the integrity of the data for reporting, while leveraging the insights for decision-making for organizational growth.”
-ends-
Notes to editors
About EY
EY exists to build a better working world, helping create long-term value for clients, people and society and build trust in the capital markets.
Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate.
Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws. For more information about our organization, please visit ey.com.
This news release has been issued by Ernst & Young LLP, a member of the global EY organization.
About CPA Australia
CPA Australia is one of the largest professional accounting bodies in the world, with more than 173,000 members in over 100 countries and regions, including more than 8,600 members in Singapore. CPA Australia has been operating in Singapore since 1954 and opened our Singapore office in 1989. Our core services include education, training, technical support and advocacy. CPA Australia provides thought leadership on local, national and international issues affecting the accounting profession and public interest. We engage with governments, regulators and industries to advocate policies that stimulate sustainable economic growth and have positive business and public outcomes. Find out more at cpaaustralia.com.au
