How Singapore issuers can shift to ISSB-aligned climate reporting

Adoption rate of the ISSB standards in Singapore

With all SGX-listed issuers mandated to transition their climate-related disclosures from the TCFD framework to the ISSB standards in FY 2025, the study also looked at whether issuers have begun adopting the ISSB standards early for their FY 2024 climate reporting.

In FY 2024, 14% of the issuers considered ISSB standards in forming their climate-related disclosures. 

The study also looked at selected disclosure requirements under the ISSB standards as well as maturity in coverage of the TCFD requirements to assess readiness to adopt the ISSB framework.

Where disclosures under the ISSB requirements were found to overlap with those under the TCFD framework, improvements in coverage were observed for the following:

The way forward

As companies shift to climate reporting under the ISSB standards, it is crucial to recognize that beyond compliance and reporting, the primary focus remains on actions that companies take to drive real-world change in their sustainability journeys. They should also consider whether the information is presented in a clear, comparable and credible manner to enable users to make informed decisions.

To accelerate change, issuers should consider the following actions:

1. Understand the true exposure of climate-related impact to the business

Having access to both quantitative and qualitative information is critical in understanding the extent of the impact of climate-related risks and opportunities on enterprise value as well as the wider environment and society, thereby enabling the organization to make informed strategic decisions.

Yet many companies are passive about climate-related issues, and few have embarked on a quantitative-based analysis of climate-related risks and opportunities.

Without conducting an adequate assessment, companies may struggle to mitigate climate-related risks to which they are materially exposed. Furthermore, they may miss out on opportunities, such as increased access to funding via sustainability-linked financing, grants and new revenue streams, leading to a potential loss in competitive edge to their peers.

2. Develop a robust transition plan

To create an actionable transition plan, companies need to gather information that provides a comprehensive view of their environmental footprint together with their climate-related risks and opportunities. Effective resource planning and allocation are also critical for a viable transition to a low- or no-carbon economy.  

When communicated clearly, a transition plan demonstrates clarity in the company’s vision and accountability for its commitments. 

This approach enables issuers to focus on their material exposures while aligning with the latest climate science trajectory to meet stakeholder expectations to survive and thrive in the medium to long term.

3. Equip members across different functions with sustainability knowledge

The responsibility for sustainability does not lie solely with the sustainability team. Instead, it extends across various functions within the organization. For instance, with the introduction of ISSB standards, it emphasizes the connectivity of sustainability-related financial disclosures, which requires the finance function to help prepare information for climate reporting purposes. 

To effectively promote sustainability, both board members and employees should possess a strong understanding of sustainability and key topics. Such knowledge will help them recognize the implications of climate change for their roles and encourage cross-functional collaboration to support the organization’s sustainability agenda.

Summary

From FY 2025, all Singapore issuers must disclose mandatory climate-related information under the new ISSB regime, which supersedes the current TCFD-based “comply or explain” approach. As companies transition to climate reporting under the ISSB standards, they must adequately assess the actual exposure of climate-related impact to the business, develop a robust transition plan and equip different functions with sustainability knowledge to accelerate their sustainability journeys.