In August 2025, the Accounting and Corporate Regulatory Authority and Singapore Exchange Regulation announced that the deadlines for fully implementing climate reporting requirements have been pushed back. Originally, all issuers on the Singapore Exchange were required to disclose Scopes 1 and 2 greenhouse gas (GHG) emissions as well as other climate-related disclosures under the new International Sustainability Standards Board (ISSB) regime for their FY25 reporting.
With the timeline extension, issuers only need to disclose Scopes 1 and 2 emissions in accordance with IFRS S2 for now, and only constituents on the Straits Times Index are also required to report all other climate-related disclosures under the new ISSB regime from FY25.
This is indeed a reprieve for many smaller listed companies as they work on developing their climate reporting capabilities. That said, issuers with a market capitalization of S$1 billion and above will also need to report all other ISSB-based climate-related disclosures from FY28, while those with a market capitalization below S$1 billion will need to do so from FY30.
This means that companies are required to report their Scopes 1 and 2 GHG emissions and disaggregate them between the consolidated accounting group and other investees. Additionally, they must disclose their measurement approach, inputs, assumptions and any changes to these disclosures during the reporting period.
For Scope 2 GHG emissions, issuers also need to provide location-based data and information about any contractual instruments (e.g., renewable power purchase agreements, renewable energy certificates). Compared with the previous Task Force on Climate-related Financial Disclosures regime, IFRS S2 is more prescriptive about the required scope and information surrounding Scopes 1 and 2 GHG emissions.
Challenges faced
As companies prepare for their reporting this year, they need to consider the following.
The first consideration relates to having a complete and accurate picture of the Scopes 1 and 2 GHG emissions. This starts with having a clear definition of the organizational boundaries for arrangements like joint ventures, associates and leased assets that may pose challenges. This is because companies may have varying degrees of control of the investment, which can impact how they account for the emissions.
The second consideration is in the selection of the emissions factor, which converts activity data into equivalent carbon emissions. When selecting appropriate emissions factors, companies need to consider their relevance. Emissions factors can be sourced from national government databases, industry reports or academic studies and may be periodically updated. It is crucial for organizations to evaluate the credibility and relevance of these sources for more accurate reporting of emissions.
However, geographic variability of the operations can impact emissions factors due to differences in local energy generation sources and regulatory requirements, particularly those impacting Scope 2 emissions. Organizations with operating sites in multiple regions should ensure that appropriate factors are applied, where available.
In quite a few cases, the underlying activity details for calculating emissions may not be available. This means companies may need to rely on proxies to estimate emissions, which introduces assumptions and necessitates a degree of judgment.
For example, for Scope 1 emissions, in instances where fuel consumption for fleets is not monitored, fuel efficiency or distance traveled may serve as proxies. For Scope 2 emissions, obtaining electricity consumption may pose a challenge due to the absence of metered data, arising from factors like location or leasing arrangements. Consequently, companies may rely on electricity consumption intensity metrics that correspond to the facility type and its geographical location to estimate emissions. It is always essential to document the assumptions made and work toward actions that support enhanced accuracy for the future.
Another consideration that many companies need to plan for is in integrating sustainability data with financial information. Traditional data management systems used to govern financial data are often not designed for tracking sustainability data and such disparate systems can hinder compliance with IFRS S2 requirements. For example, GHG emissions may be tracked at the facility level while financial data is managed at the entity level. Therefore, additional efforts may be required to reconcile facility-level GHG emissions data with the respective entities to ensure completeness of information covering the consolidated group and other investees.
