Requests made by businesses in Singapore to postpone the mandate for smaller companies to report their greenhouse gas emissions data.
The Singapore Business Federation (SBF), a key business association representing over 32,000 companies in Singapore, has made several recommendations to ease the compliance burden on smaller listed firms as they prepare to meet climate-related disclosure requirements under the International Sustainability Standards Board (ISSB) framework.
The government of Singapore announced last year that it will implement mandatory climate-related reporting requirements for listed and large non-listed companies. However, a recent survey and roundtable engagement by the SBF revealed that only 4% of small- and mid-cap companies, which account for 84% of listings on the SGX, expressed confidence in meeting the existing 2025 deadline. Common hurdles include limited understanding of the disclosure requirements, insufficient resources, and the need to develop internal data collection and reporting systems from the ground up.
In response, the SBF has called for a 12- to 24-month extension for smaller listed firms on the Singapore Exchange (SGX) to comply with the mandatory climate-related disclosure requirements, which are currently set to start for financial years beginning on or after January 1, 2025.
To aid smaller companies, SBF recommends implementing proportional reporting standards that are tailored to the size and maturity of companies. They also suggest providing sector-specific guidance and standardized climate disclosure frameworks to simplify compliance. The SBF has proposed the establishment of a centralized digital platform for climate-related disclosures to streamline reporting processes and data collection.
The SBF recognizes the value of companies making ISSB-based climate-related disclosures for enhancing their resilience against climate risks and seizing opportunities in the transition towards a low-carbon future. More than 90% of small- and mid-cap companies said that extending the timeline would be useful in enabling them to produce high quality ISSB reports. The SBF's proposed central platform aims to make sustainability information available in a standardized format for national- and sector-level benchmarking, similar to SGX's Stock Screener for financial data.
The SBF plans to continue working closely with regulators such as SGX RegCo, ACRA, and Enterprise Singapore to ensure smaller businesses are equipped with the necessary tools and knowledge to fulfill their climate reporting obligations effectively. Mr Kok Ping Soon, CEO of SBF, notes that small- and mid-cap ListCos are facing practical barriers such as methodological issues and manpower constraints in preparing for climate-related disclosures.
In summary, SBF advocates for a delay in the climate disclosure deadline for smaller firms and calls for supportive measures including tailored standards, guidance, and digital infrastructure to ease the compliance burden on these companies. The ultimate goal is to help small- and mid-cap companies navigate the complex world of climate-related disclosures and contribute to Singapore's ambitious sustainability goals.
- The Singapore Business Federation (SBF) advocates for a delay in the climate disclosure deadline for smaller firms, citing hurdles such as limited understanding, insufficient resources, and the need to develop internal data collection systems.
- In response to the challenges faced by smaller companies, SBF proposes implementing proportional reporting standards tailored to their size and maturity, providing sector-specific guidance, and establishing a centralized digital platform for climate-related disclosures.
- The SBF believes that that extending the timeline for smaller businesses would be beneficial in enabling them to produce high-quality International Sustainability Standards Board (ISSB) reports, as more than 90% of small- and mid-cap companies expressed this view.
- Recognizing the importance of climate reporting in enhancing resilience and seizing opportunities in the transition towards a low-carbon future, SBF plans to work closely with regulators like SGX RegCo, ACRA, and Enterprise Singapore to ensure smaller businesses are equipped with the necessary tools and knowledge for effective climate reporting.
