Consultation Paper
July 2023

Turning Climate Ambition into
Action in Singapore- Recommendations by the
Sustainability Reporting
Advisory Committee

PREFACE
1.
With support from the Ministry of Finance, ACRA and SGX RegCo set up the
Sustainability Reporting Advisory Committee (SRAC) in June 2022.
2.
SRAC’s roles include advising on a roadmap for wider implementation ofsustainability reporting by companies in Singapore. The roadmap will uphold
Singapore’s attractiveness as a global business hub while contributing to ournational agenda on sustainable development under the Singapore Green Plan 2030.
Request for Comments
3.
ACRA and SGX RegCo invite the public to provide comments on the SRAC’s
report by 30 September 2023. Comments may be submitted by clicking the following
button.
PROVIDE YOUR COMMENTS
4.
To ensure that the consultation exercise is effective, respondents arerequested to observe these guidelines:a.

Identify yourself and the organisation you represent; andb.

Where possible, substantiate your response with illustrations, together withsuggestion(s) on how the recommendation(s) can be improved.

Turning Climate Ambition into
Action in Singapore
Recommendations by the Sustainability Reporting Advisory Committee

Contents
A. Overview of SRAC Considerations ______________________________________ 6
B. International & Local Developments ___________________________________ 11
C. Companies Required to Report ________________________________________ 14
D. Reporting Standard __________________________________________________ 21
E. External Assurance ___________________________________________________ 28
F. Reporting and Filing __________________________________________________ 37
G. Other Legal Requirements ____________________________________________ 41

Glossary of Terms
Term
ACRA
AGM
CA
CPE
CRD
EnterpriseSG
ESG
EU
FS
FY
FYE
GHG

GRI
IAASB
IEC
IFRS
IOSCO
ISO
ISSA 5000
ISSB
ISSB
Standards

Definition
Accounting and Corporate Regulatory Authority
Annual General Meeting
Companies Act 1967
Continuing Professional Education
Climate-related disclosures
Enterprise Singapore
Environmental, Social and GovernanceEuropean Union
Financial statements
Financial year
End of the financial year
Greenhouse gas• Scope 1 emissions are direct emissions from owned orcontrolled sources.
• Scope 2 emissions are indirect emissions from the generation ofpurchased energy.
• Scope 3 emissions are all indirect emissions (not included in
Scope 2) that occur in the value chain of the reporting company,
including both upstream and downstream emissions.
Global Reporting Initiative
International Auditing and Assurance Standards Board
International Electrotechnical Commission
International Financial Reporting Standards
International Organization of Securities Commissions
International Organization for Standardization
IAASB’s International Standard on Sustainability Assurance, General
Requirements for Sustainability Assurance Engagements
International Sustainability Standards Board
Standards issued by the ISSB in June 2023, comprising:• IFRS S1 General Requirements for Disclosure of Sustainabilityrelated Financial Information• IFRS S2 Climate-related Disclosures

LimitedAssurance

Reasonable
Assurance

Listed Issuers

Listing Rules
NLCos
NZ
SAC
SGX Group
SGX RegCo
SMEs
SRAC
SS ISO
14064-3
TCFD
TIC firms

UK
US$

Primarily includes procedures such as inquiries and analyticalprocedures, and does not necessarily include a consideration ofwhether internal controls have been effectively designed. The
conclusion is usually provided in a negative form of expression (e.g.,“nothing has come to our attention…”).
Entails extensive procedures, which may include consideration ofinternal controls and tests of details. The conclusion is usuallyprovided in a positive form of expression (e.g., “in our opinion, thesubject matter information presents fairly…”).
Issuers of equity securities listed on Singapore Exchange Securities
Trading Limited, comprising Singapore-incorporated and foreignincorporated companies, business trusts, investment funds(excluding exchange traded funds) and real estate investment trusts
SGX Listing Rules (Mainboard) and SGX Listing Rules (Catalist)
Non-listed companies
New ZealandSingapore Accreditation Council
Singapore Exchange
Singapore Exchange Regulation
Small and Medium Enterprises
Sustainability Reporting Advisory Committee
Singapore Standard on Greenhouse gases Part 3: Specification withguidance for the verification and validation of greenhouse gas
statements
Task Force on Climate-Related Financial Disclosures
Testing, Inspection, Certification firms refers to third party entities
that provide testing, inspection or certification services to provide
assurance on the quality of products and services against regulatory
or industry standards.
United Kingdom
United States of America
Refers to Singapore dollars, unless otherwise statedForeword•

ESTHER AN
Chairperson, SRAC•

the global economy towards net zero emissions facilitated by credible,
decision-useful climate data and transition plans;3over 4,000 companies covering over one-third of the global economy’s
market capitalisation, have set climate targets or committed to do so
via the Science Based Targets initiative (SBTi);4 andan increasing number of consumers have changed their consumption
habits because of their stance on the environment.5

Climate Reporting as an Enabler
Dear Stakeholders,
Urgent Action to Combat Climate Change
The Earth is now about 1.1°C warmer than it was in the 1800s. We are noton track to meet the Paris Agreement’s target to limit global temperaturerise to 1.5°C above pre-industrial levels.1
With the carbon clock ticking, the wave of change has swept our shores.

With the above-mentioned global shifts, our local businesses are coming
under increasing scrutiny to do their part.
A global study by Standard Chartered showed that 78% of multinationals
planned to remove those suppliers that could endanger their carbon
transition plans by 2025. 57% were also prepared to replace emerging
market suppliers with developed market suppliers to aid their transition. This
could create a US$146.6 billion opportunity for our businesses that
demonstrate the ability to measure, manage and disclose GHG emissions.6

Global actions are gaining pace with:•
5,319 investors, representing US$121 trillion of assets undermanagement, have signed the Principles for Responsible Investment,
where investors incorporate ESG issues into their investment decisions
and seek ESG disclosures by the entities they invest in;2•over 550 financial institutions with US$152 trillion in assets havejoined forces under the Glasgow Financial Alliance for Net Zero to steer

At City Developments Limited, we embarked on sustainability reporting as
it forms a lever for climate action. Our journey over 16 years has allowed us
to reap energy savings of over $38 million and secure over $3 billion insustainable financing. By identifying and managing sustainability-relatedrisks and opportunities, we are now better placed to balance shareholders’value and our impact on the environment.7

1 1.5°C is considered the upper limit to avoid the worst fallout from climate change

5 42% of 10,000 individuals surveyed in Canada, Germany, Japan, Singapore, UK and(United Nations: Climate Action Fast Facts, April 2023).

US by Deloitte indicated so: #GetOutInFront Global Research Report, December
2020.

2 PRI: Quarterly signatory update, 4Q 2022.
3 GFANZ: 2022 Progress Report, November 2022.
4 SBTi drives ambitious climate action in the private sector by enabling organisations

to set science-based emissions reduction targets (About Us, April 2023).

6 Standard Chartered: Multinational Companies Planning to Cut Suppliers by 2025,

June 2021.
7 City Developments Limited: Integrated Sustainability Report 2023, March 2023.

Foreword
Acceleration of International Developments

The Path Forward for Singapore

Established reporting standards, provided by organisations such as GRI,
have helped corporates to measure and benchmark their ESG impacts andoutcomes over the years. Formed more recently, the ISSB is setting a global
baseline for sustainability disclosures to fulfil the information needs ofinvestors. Together, they provide frameworks and tools for corporates tosystematically build sustainability perspectives into their strategies, futureproofing their businesses for the long haul.

ACRA and SGX RegCo, with support from the Ministry of Finance, set up the
SRAC to advise on the roadmap for sustainability reporting by companies in
Singapore.

Sustainability or climate reporting has been legislated in at least eightjurisdictions for listed issuers. Moving a step further, four jurisdictions,
namely, EU, NZ, Switzerland and UK have recently passed laws to mandate
sustainability or climate reporting on certain larger non-listed companies.

In making these recommendations, we have adopted practical measuresaligned with Singapore’s ambition. The measures include focusing on
climate reporting at the start and using a phased and tiered implementation
timeline, to allow room for nation-wide capacity building.

As the Chairperson of SRAC, I hope these recommendations will rally
economically significant corporates and other stakeholders towards
realising our national climate targets and transitioning to a green economy.8

We look forward to your views on SRAC’s recommendations.

ESTHER AN
Chairperson, SRAC

8 Prime Minister’s Office Singapore: Singapore's Climate Targets - Overview, April

2023; Singapore Green Plan: Green Economy, April 2023.

Executive Summary
With support from the Ministry of Finance, ACRA and SGX RegCo set up the SRAC in
June 2022. The SRAC’s roles include advising on a roadmap for wider implementationof sustainability reporting by companies in Singapore. The roadmap will uphold
Singapore’s attractiveness as a global business hub while contributing to our national
agenda on sustainable development under the Singapore Green Plan 2030.
Reaping Benefits from Reporting, while Combating Climate Change
Globally, there is corporate, investor, lender and consumer momentum for bolder
climate action to limit global warming to 1.5°C under the Paris Agreement. To survive
and do well in this new environment, companies need to decarbonise and pivot
towards greening their products and services.
Companies ahead of the curve in their decarbonisation journeys could benefit throughaccess to new markets and customers and financing. Those who are slow to act may
lose out to their competitors. They could also be at risk of being removed from thevalue chain for not doing enough to incorporate climate risks into their businessmodels and strategies.

The sooner companies measure their emissions and develop climate strategies, thesooner they can transform their businesses to succeed in a low-carbon future.9 Climate
reporting will provide certainty to this direction of travel and act as a diagnostic tool
to help our companies understand and meet the challenges ahead, thereby realising
the opportunities presented by climate change.

9 PwC: Are you ready for the ESG revolution?, June 2021.

1

Executive Summary
International Regulatory Developments
Globally, at least eight jurisdictions have mandated sustainability or climate reporting
requirements via legislation on their listed companies. EU, NZ, Switzerland and UK
require mandatory reporting in accordance with specific frameworks covering listed
and non-listed companies. Meanwhile, China, Indonesia, Japan and Vietnam’s
requirements are framework-agnostic covering only listed companies.
In April 2023, the G7 Ministers called for partners beyond the G7 to implement
mandatory CRD, to provide consistent and decision-useful information for market
participants.10 This is seen as a necessary step to accelerate sustainable finance andhelp achieve global climate goals.
Mandating Climate Reporting via Companies Act
We aim to turn Singapore’s climate ambition into action. Our recommendation is toextend mandatory climate reporting to large NLCos, which are economically significant
and well-placed to drive changes across their value chains. Together with the Listed
Issuers, they will be required to report ISSB-aligned CRD and obtain external assurance
to meet the information needs of investors, lenders, and other users.
Figure 1. Broad directions of the SRAC’s recommendations
Where we are…

What we recommend…
Widen scope to cover non-listed
Widen scope to cover NLCos.
companies

Only listed companies are required to report.

Sustainability (ESG) reporting since 2017.

Choice of any international SR framework since
2017;,mandate
but mandate
in sectors
five5 sectors
from
2017;
TCFDTCFD
in fivefrom 2023.
FY2023.
Internal review of sustainability reporting
processes
since2022. since 2022.
reportingSR
processes

Sustainability
Reporting
Implementation

Adopt a climate-first approach, given
the urgency to combat climate change.
Prescribe(specific)
ISSB
Sstandards
Prescribe(specific)
ISSB
Standards
totoenhance comparability.
enhance comparability.
Impose external assurance toincrease stakeholder confidence.

Our recommendation for wider adoption of disclosures underpins a market-based
approach to incentivise companies to transform and build resilience, among otherbenefits. Disclosures provide the necessary data to enable investors and lenders toassess how climate change affects companies’ prospects and facilitates the allocationof capital. Companies that have put in place sound strategies to build resilience,
10 Group of Seven (G7) is an informal grouping of seven of the world’s advanced economies, namely Canada, France,

Germany, Italy, Japan, UK and US. (G7 Climate, Energy and Environment Ministers’ Communiqué, April 2023)

2

Executive Summary
manage climate risks and report progress will be rewarded and thrive in a low-carbon
economy.
SRAC Balancing Climate Ambition with Practicality
While we believe there are clear benefits to mandating reporting for large NLCos, werecommend pacing the implementation timeline considering international adoptionof climate reporting and the phase-in period required for companies to adjust.
We also recommend beginning with climate reporting to manage the complianceburden and provide time for capacity building. We start with Limited Assurance on
Scope 1 and Scope 2 GHG emissions and allow audit firms and TIC firms to provide
the service. Doing so will expand the talent pool thereby lowering the costs.
We have consulted over 90 stakeholders before finalising our recommendations.11
Their suggestions and views have been incorporated in the recommendations.

Figure 2. A balanced approach
Start with Listed Issuers,
followed by large NLCosin two phases

Start with climate
using (baseline)
ISSB Standards

Provide temporary relief
from disclosing Scope 3
GHG emissions

Start with Limited
Assurance on Scope 1 andScope 2 GHG emissions

Expand talent poolby allowing TIC firms
to provide assurance

Leverage on financial
reporting processes

11 These stakeholders include company preparers, assurance providers, readers of report, trade associations andprofessional bodies.

3

Executive Summary
Who Needs to Report? Listed Issuers will lead the way and be required to report ISSBaligned CRD from FY2025. This will be followed by NLCos with revenue of at least $1
billion in FY2027.
A review will be conducted in 2027 with the view to mandate climate reporting on
NLCos with revenue of at least $100 million a few years later, by around FY2030. The
review will consider factors such as international developments, industry capacity andthe implementation experience of larger NLCos.
What to Report? Climate reporting using the prescribed CRD, mirroring therequirements in the ISSB Standards to the extent practicable. Companies may
concurrently report using other standards such as GRI. Reliefs from complex
disclosures such as Scope 3 GHG emissions will be available.
What to Externally Assure and by Whom? Obtain external Limited Assurance inrespect of its Scope 1 and Scope 2 GHG emissions two years after the mandatory
reporting requirements take effect. ACRA-registered audit firms and SAC-accredited
TIC firms can apply to be climate auditors; they are required to conduct assurance work
using endorsed local standards modelled on ISSA 5000 or ISO 14064-3.
When to Report and File? Same reporting, circulation, tabling at AGM and filingtimelines as FS. Mechanism to apply for extension of time is available. File in digitalstructured format to facilitate data consumption by the public.
Who is Responsible for Compliance? Same legal responsibilities as those for financial
reporting (company, directors and officers), except for the requirements to devise andmaintain internal controls system, which will be encouraged but not mandated.
Table 1 below summarises the phased and tiered implementation timeline.
Table 1: Proposed implementation timeline
ReportReportprescribed
Scope 3baseline CRD
GHG(with reliefs)
emissions
FY beginning on or after 1 January

Obtain external
Limited Assurance
over Scope 1 & Scope
2 GHG emissions

All Listed Issuers

2025

2026

2027

NLCos with annual revenue of atleast $1 billion

2027

2029

2029

NLCos with annual revenue of atleast $100 million to less than $1
billionA review will be conducted in 2027
with the view to require reporting a few years later, byaround FY2030.

4

Executive Summary
Capacity Building to Support Implementation
The Ministry of Trade and Industry, in partnership with SkillsFuture Singapore, has set
up a Green Skills Committee to drive Singapore’s efforts in developing the skills andtraining programmes required for a green economy. One of its working groups, led by
ACRA and EnterpriseSG, is tasked to develop the skills plan focusing on sustainability
reporting and assurance.12
To empower and partner companies in the green transition, EnterpriseSG has launched
the Enterprise Sustainability Programme. With $180 million set aside, the programme
will help Singapore companies, especially SMEs, build capabilities and capture
opportunities in the local and global economy. This includes initiatives such asworkshops and guides to help SMEs with sustainability reporting, as well as otherinitiatives to help SMEs manage their carbon emissions.13
Workforce Singapore’s Capability Transfer Programme aims to support companies that
require transfer of niche and emerging skills and knowledge through a foreign
specialist to its local workforce.14
SGX Group has conducted and will continue to conduct capacity building efforts tobuild awareness and skillsets in the ecosystem. SGX RegCo intends to work withpartners such as ACRA, Singapore Institute of Directors and GRI to conduct training
for directors to deep dive into specific sustainability-related issues and for workinglevel preparers of sustainability reports to strengthen their technical knowledge onsustainability reporting.
The Institute of Singapore Chartered Accountants is actively engaged in capacity
building efforts focused on sustainability. It has organised conferences and events,
rolled out courses, issued practical guidance, and published research on sustainability
jobs and skills for the accountancy profession. It is also developing professional
qualification programmes, with support from ACRA, for sustainability and sustainability
assurance to equip professionals with the requisite skillsets.15

12 Ministry of Trade and Industry and EnterpriseSG: MTI COS 2023 - Supporting businesses and workers in ourjourney to a green economy, February 2023.
13 EnterpriseSG: Enterprise Sustainability Programme, April 2023.
14 Workforce Singapore: Capability Transfer Programme, April 2023.
15 Institute of Singapore Chartered Accountants: Sustainability Courses, April 2023.

5

A. Overview of SRAC Considerations
A.

Overview of SRAC Consider at ions

Impact from Climate Change
A1.
The effects of climate change are widespread, rapid and intensifying, affecting
lives and livelihoods around the world. Extreme weather events have also affected
millions of lives and cost billions in 2022.16
Figure 3. The global impact of climate change (Physical risks)

Our Earthexperienced
the eight
warmest years
on record
since 2014.

The rate of sea
level rise hassince doubled
doubled
since
since
1993.
1993.

Ocean heat
was at record
levels in 2021.
2021(latest year
assessed).

Atmosphericlevels of three
main
main
GHG
reachedgreenhouserecordgases
levels inreached2021.
record levels in
2021.

Ten10
Ten
10 costliest
costliest
costliest
extremeclimatedisasters
weatherin2022
disasters
cost over
in
2022
US$3
2022
cost
billion
cost
over
US$3
more
each.
billionthan
US$3bneach.each.

A2.
As a low-lying island city-state, climate change is an existential threat forSingapore. From 1980 to 2022, the annual mean temperature has increased by 1°C to
27.9°C. The mean sea level in the Straits of Singapore has also increased between 1.2
mm and 1.7 mm per year from 1975 to 2009. Rainfall has become more intense as well,increasing at an average rate of 78 mm per decade from 1980 to 2022.17
Actions to Combat Climate Change
A3.
On 12 December 2015, 196 parties signed an international treaty on climatechange (known as the Paris Agreement) at the 2015 United Nations Climate Change
Conference. It aims to hold “the increase in the global average temperature to well
below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature
increase to 1.5°C above pre-industrial levels”.18
A4.
In 2020, environmental risks occupied the top five risks in terms of likelihood
over the coming decade for the first time, according to the World Economic Forum’s

16 National Environment Agency: Singapore’s Fifth National Communication and Fifth Biennial Update Report 2022,

November 2022; World Meteorological Organisation: Eight warmest years on record witness upsurge in climatechange impacts, November 2022; World Economic Forum: 10 costliest climate disasters of 2022, January 2023.
17 Prime Minister’s Office Singapore: Impact of Climate Change in Singapore, April 2023; Meteorological Service

Singapore: 2022 Annual Climate Assessment Report, April 2023.
18 United Nations’ Climate Change: The Paris Agreement, April 2023.

6

A. Overview of SRAC Considerations
annual risk report. In its 2023 report, the “failure to mitigate climate change” continued
to be ranked as the top global risk over the next 10 years.19
A5.
Faced with a narrowing window for decisive international action on climatechange, the global community – countries, corporates, investors and consumers – must
reduce GHG emissions urgently. Over 8,000 companies have committed to halve
emissions by 2030 and achieve net zero by 2050.20
A6.
In Singapore, we have stepped up our efforts through the Singapore Green Plan
2030. The Green Plan charts ambitious and concrete targets over the next decade,strengthening Singapore’s commitments under the United Nation’s 2030 Sustainable
Development Agenda and the Paris Agreement. It also positions us to achieve
Singapore’s commitment to reach net zero emissions by 2050.21
A7.
As we transition to a low carbon economy, we are already seeing strong action
being taken using control levers such as carbon taxes (known as “transition risks” forcompanies). For instance, Singapore will be ratcheting up its carbon taxes from thecurrent $5 per tonne of CO2e to $50-80 per tonne of CO2e by 2030.22“At the macro level we’ve long passed the point where the cost of action is far
lower than the cost of inaction.”23−Paul Polman, ex-CEO, Unilever
Benefits of Climate Reporting to Companies
A8.
There have been more than 2,000 academic studies and around 70% of themfound a positive relationship between ESG scores and financial returns, whether
measured by equity returns or profitability or valuation multiples. A global study
focusing on NLCos also surmised that strong ESG performance was a sign of a strong
business.24
A9.
Global CEOs surveyed in a study increasingly agreed that ESG programs
improved financial performance and saw reporting and transparency as important totheir ESG goals – and this included insights into their broader value chain. They
19 World Economic Forum: Global Risks Report 2020, Jan 2020; Global Risks Report 2023, January 2023.
20 United Nation Climate Change: Race To Zero Campaign, April 2023.
21 Singapore Green Plan: Home, April 2023.
22 The TCFD groups transition risk into four categories, namely, policy and legal risk, technology risk, market risk

and reputation risk. Prime Minister’s Office Singapore: Carbon Tax, April 2023.
23 Harvard Business Review: Yes, Investing in ESG Pays Off, April 2022.
24 McKinsey: Why ESG is here to stay, May 2020; Study by Bain & Company and EcoVadis: Do ESG Efforts Create

Value?, April 2023. The study assessed how ESG activities impacted 100,000 companies tracked by EcoVadis (over95% are private). EcoVadis is a leading supplier of business sustainability ratings.

7

A. Overview of SRAC Considerations
increasingly understood that companies embracing ESG were best able to securetalent, strengthen employee value proposition, attract loyal customers and raise
capital.25 Companies that adopt climate reporting are well placed to reap the following
opportunities:(a)Manage climate risks: Robust measurement of emissions supports companies
in planning for the green transition and managing emissions throughout theirvalue chains. Climate reporting also improves companies’ visibility of physicalrisks (thus reducing the risk of stranded assets) and ability to manage transition
risks (potentially higher operating costs arising from climate-related
regulations).

(b)

Potential cost reduction: The focus on ESG practices and reporting can help
combat rising operating expenses (such as raw material costs and the true costof carbon), which global research found can affect operating profits by as muchas 60%. It also decreases the likelihood of incidents and business interruptions,easing regulatory and legal interventions and the associated costs.26(c)Potential increase in revenue: A group of the world’s biggest companies
reported cumulative gains from realising business opportunities related toclimate change at US$2.1 trillion. These opportunities include increased revenue
through demand for low emission products and services and shifting consumer
preferences.27“We’re looking forward to continued partnerships with our suppliers tomake Apple’s supply chain carbon neutral by 2030.”28−Tim Cook, CEO, Apple(d)

Employer of choice: Compared to their peers, top employers (as measured by
employee satisfaction and attractiveness to young talent) tend to have lower
carbon emissions. As a workforce strategy, ESG performance has become acompetitive edge – both in engaging today’s employees and attracting
tomorrow’s talent.29(e)Access to capital: Companies that adopt climate reporting and provide
transparency on their transition strategies are better positioned to attract

25 KPMG: 2022 CEO Outlook, April 2023.
26 McKinsey: Five ways that ESG creates value, November 2019.
27 CDP: World’s biggest companies face US$1 trillion in climate change risks, June 2019.
28 Apple Newsroom: Apple calls on global supply chain to decarbonize by 2030, October 2022.
29 Marsh & McLennan Advantage: ESG as a workforce strategy, April 2023.

8

A. Overview of SRAC Considerations
capital, as such disclosures can help financial institutions understand andevaluate their climate strategy and performance.30“Ignoring the financial risk inherent in climate change will make itharder for companies to find investors.”31−Larry Fink, Chairman and CEO, BlackRock(f)

Lower cost of capital: A high degree of transparency in reporting material ESG
data publicly leads to a better ESG score. Evidence is emerging that a better ESG
score translates to about a 10% lower cost of capital, as the risks that affect thebusiness are reduced.32

A10. A global analysis on climate change found that the potential value ofsustainable business opportunities (US$2.1 trillion) was almost seven times the cost ofrealising them (US$311 billion in costs).33
Costs of Climate Reporting to Companies
A11. The cost of reporting and assurance is influenced by many factors such as thesize of the company, the sectors in which it operates, its locations, the depth ofreporting chosen, and in general the complexity of the business.
(a)

There is no readily available data for cost analysis in Singapore.

(b)

The EU requirements involve reporting on all three ESG factors and obtaining
external Limited Assurance on the entire sustainability report. The scope is wider
than our recommendations. EU has estimated compliance costs of €607,000 (or$884,000) in the first year and €320,000 (or $466,000) per annum thereafter.
Administrative costs to report can range from 0.004% to 0.008% of a company’s
yearly revenue whilst auditing costs for Limited Assurance can range from
0.013% to 0.026% of revenue.34

30 MAS: Guidelines on Environmental Risk Management for Banks, Insurers, Asset Managers, December 2020.
31 BlackRock: Larry Fink’s 2020 Letter to CEOs – A Fundamental Reshaping of Finance, April 2023; Bloomberg: For

these companies, climate action is a business imperative, April 2023.
32 Refinitiv: Environmental, Social and Governance Scores from Refinitiv, May 2022; McKinsey: Why ESG is here tostay, May 2020.
33 CDP: World’s biggest companies face US$1 trillion in climate change risks, June 2019.
34 European Commission: EFRAG's Cover Letter on the Cost-benefit analysis of the First Set of draft ESRS, November

2022; Wall Street Journal: At Least 10,000 Foreign Companies to Be Hit by EU Sustainability Rules, April 2023.
Converted to SGD using MAS exchange rate on 17 May 2023: € (1.4571).

9A. Overview of SRAC Considerations(c)

In UK, where external assurance is not required, the preparation and internalverification costs are estimated at £197,000 (or $330,000) in the first year and£144,000 (or $241,000) per annum thereafter.35(d)

If the same costs as EU or UK apply, they will represent less than 0.1% of $1
billion in revenue for NLCos subject to mandatory reporting.

A12. While we note that additional costs may be incurred by companies to perform
climate reporting, this would soon become an inevitable cost of doing business if
companies would like to stay competitive in a low-carbon future, remain connected tothe market and tap funding sources.
Benefits of Wider Adoption of Climate Reporting to Singapore
A13. At the national level, the wider adoption of climate reporting aligns with theSingapore Green Plan 2030 and will allow us to:(a)

Scale green finance: The International Monetary Fund identified
implementation of a climate information architecture built upon the ISSB
Standards as a prerequisite for the development of sustainable financemarkets.36 Mandatory reporting will lift the data constraint and catalyse our net
zero transition by facilitating green finance flows into Singapore to decarbonise
our economy.

(b)Grow carbon services hub: Mandatory reporting will accelerate the growth ofSingapore’s existing ecosystem of carbon services and build on Singapore’s
advantages, such as its hub position for green finance and commodity trading,and proximity in Asia, to strengthen its effectiveness in offering carbon
management services to companies globally.37(c)Grow professional services hub: The demand for reporting will help develop
capabilities in our ecosystem for professional services such as sustainability
reporting and assurance. This will position us to gain competitive advantage toservice the region and create good, green jobs for Singaporeans.

(d)Reap economies of scale: A critical mass in companies adopting climate
reporting, paired with support from the Government to level up reporting andassurance capabilities nation-wide, will reduce compliance costs.

UK Department for Business, Energy & Industrial Strategy: Final Stage Impact Assessment, October 2021.
Converted to SGD using MAS exchange rate on 17 May 2023: £ (1.6738).
35

36 International Monetary Fund: Shaping the Frontier of Sustainable Finance in Emerging Markets, April 2022.
37 EDB Singapore: Singapore is well positioned to become a Carbon Services and Trading Hub for Southeast Asiaand the Asia Pacific, November 2021.

10

B. International & Local Developments
B.

Internation al & Local D evelop ments

Mandatory Reporting for Listed Issuers Present in Several Jurisdictions
B1.
Globally, at least eight jurisdictions have mandated sustainability or climate
reporting requirements on listed companies via legislation. EU, NZ, Switzerland and
UK require mandatory reporting in accordance with specific frameworks, whilst China,
Indonesia, Japan and Vietnam are framework-agnostic.
B2.
In March 2022, the US Securities and Exchange Commission consulted on its
proposal to mandate climate reporting progressively from FY2023. It is still finalising
the rules.
B3.
In April 2023, the Stock Exchange of Hong Kong issued a consultation paper
proposing to mandate ISSB-aligned CRD for all issuers from FY2024 via listing rules.38
B4.
In Singapore, Listed Issuers in five prioritised industries are required to provide
full TCFD-aligned CRD progressively from FY2023. All other Listed Issuers are required
to apply TCFD on a ‘comply-or-explain’ basis.

38 HKEX: Exchange Publishes Consultation Paper on Enhancement of Climate Disclosure under its ESG Framework,

April 2023.

11

B. International & Local Developments
Mandatory Reporting for Non-Listed Companies Present in Several Jurisdictions
B5.
Four jurisdictions have moved a step further, by passing laws to mandate
sustainability or climate reporting on NLCos:39(a)

From 6 April 2022, large private companies in UK are required to makeclimate-related financial disclosures, in addition to large publicly quoted
companies and large limited liability partnerships.40
The UK government recognised that economically or environmentallysignificant companies were not limited to entities with securities admitted to
trading on a regulated market.

(b)

From 1 January 2023, large publicly listed companies in NZ with market
capitalisation exceeding NZ$60 million and large companies (including
private companies) in the financial sector with total assets exceeding NZ$1
billion are required to make CRD.
The requirements were premised on the report of the Intergovernmental Panelon Climate Change that highlighted significant green investments wererequired to achieve the Paris Agreement’s goal of limiting global temperature
increase to 1.5°C. By using financial markets to drive a change in investment
patterns, private companies will receive direct and indirect pressure to identify
and manage climate-related risks and opportunities.

(c)

Progressively from 1 January 2024, large NLCos in EU will be required toprepare sustainability reports (including and beyond climate reporting) alongwith non-micro listed companies. 41 The requirements will also apply to non-EU
companies with substantial activity in EU from 1 January 2028.42
The requirements will directly cover about 75% of the European economy, whileother companies will also be impacted through the value chain.

39 EU: Corporate Sustainability Reporting; NZ: Mandatory climate-related disclosures; Switzerland: Federal Council

brings ordinance on mandatory climate disclosures for large companies into force as of 1 January 2024; UK: UK toenshrine mandatory climate disclosures for largest companies in law, April 2023.
40 In UK, large private companies are companies with > 500 employees and turnover of > £500 million.
41 In the EU:•

Large companies comprise those that exceed at least two of the three size criteria: (a) balance sheet total: €20
million; (b) net revenue: €40 million; (c) average number of employees during the financial year: 250.

•

Micro companies comprise those that do not exceed at least two of the three criteria: (a) balance sheet total:€350,000; (b) net turnover: €700,000; (c) average number of employees during the financial year: 10.

42 This means that the company has a net revenue in the EU of €150 million and the company has at least: one

branch in the EU with at least €40 million net revenue or one subsidiary in the EU that meets EU’s large company
requirements.

12

B. International & Local Developments
The EU Commission was of the view that consumers and investors deserved toknow the sustainability impact of businesses. It also aimed to steer capital flows
to sustainable investments through sustainability reporting, thus achieving
sustainable and inclusive growth.
(d)From 1 January 2024, large public companies, banks and insurancecompanies (including NLCos) in Switzerland are required to make climate
disclosures.43
The Swiss government acknowledged that large companies’ transparency on
the climate impact of their activities is a key aspect for capital markets tofunction well and for the financial sector to achieve climate sustainability.

B6.
In June 2023, the Australian Government Treasury issued a consultation paper
proposing to mandate ISSB-aligned CRD for listed and non-listed entities in threephases commencing 2024-25.44

43 In Switzerland, large companies comprise companies with 500 or more employees and at least CHF20 million in

total assets or more than CHF40 million in turnover.
44 Australian Government, The Treasury: Climate-related financial disclosure - Consultation paper, June 2023.

13

Recommendations by SRAC
C. Companies Required to Report
C1.
Corporates have a part to play to achieve Singapore’s net zero emissionscommitment and transition to a green economy. To foster a greater impact inSingapore, we propose to mandate climate reporting on economically significant
companies. These companies have a higher carbon footprint and the potential to drivechanges through their value chains.
C2.
The proposed requirements will present an opportunity for our companies tobuild business resilience and competitive advantage ahead of others. By embracing
climate reporting, they will be better prepared to navigate overseas markets and tap
on funding sources, to which access is increasingly shaped by climate considerations.
C3.
We propose that the requirements be mandated through the CA, in addition to
the Listing Rules. This will uphold the parity of treatment between Listed Issuers andNLCos. It will also bring more comparability and credibility of CRD in our market.

Listed Issuers Leading the Way
C4.
Since 2017, Listed Issuers have been required to publish sustainability reports.
SGX Group introduced this requirement in line with international advancements,
expectations on sustainability reporting and the benefits it brings to both investors
and issuers.45 By 2021, almost 100% of Listed Issuers have prepared sustainability
reports in accordance with at least one sustainability reporting framework.46
C5.
From FY2023, Listed Issuers in five prioritised industries are progressively
required to provide TCFD-aligned CRD. SGX RegCo introduced this roadmap to meet

45 SGX Group: Consultation Paper – Sustainability Reporting: Comply or Explain, January 2016.
46 SGX Group and NUS Centre for Governance and Sustainability: Sustainability Reporting Review 2021, May 2021.

14

Recommendations by SRAC
the increasing demand from investors and lenders, encouraging Listed Issuers to build
business resilience by anticipating climate-related issues.47
C6.
Taking a step further, we propose to require all Listed Issuers48 to report
CRD mirroring the requirements in the ISSB Standards from FY beginning on orafter 1 January 2025 (see Recommendation D1). This will build on their momentum
and progress in climate reporting.
C7.
Issuers of listed debt securities are excluded as they are largely offered towholesale investors and typically traded over the counter. The information thatinvestors expect to be disclosed in respect of debt securities is limited as compared toequity securities. Issuers of listed debt securities may continue to adopt internationalsustainability bond standards, such as the International Capital Market Association’s
Green Bond Principles, Social Bond Principles or Sustainability Bond Guidelines.
Large NLCos to Follow Suit, with Exemptions
C8.
Other than those subject to the Energy Conservation Act 2012 and Carbon
Pricing Act 2018, our NLCos are not required under legislation to prepare any form ofclimate reporting in Singapore. Globally, private companies trail behind publiccompanies by a wide margin in reporting on environmental and climate impacts.49 The
benefits of mandatory reporting serve as an impetus to bring private companies to thestate of reporting.
C9.
We propose to mandate CRD on the following NLCos, subject to certain
exemptions (in Recommendation C2):(a)

NLCos with annual revenue of at least $1 billion from FY2027 (estimated300 companies, after considering exemptions).
These are economically significant companies with higher exposure to climaterelated risks. With more resources to deploy, they should be ready by FY2027.
We believe that some may have already started their climate reporting journey.
Further, these companies may have a wider geographical footprint. Hence, they
may be subject to other jurisdictions’ reporting requirements. For example, EU’s
sustainability reporting requirements will apply to non-EU companies with
substantial activity in EU from 1 January 2028.

47 SGX RegCo: Consultation Paper – Climate and Diversity: The Way Forward, August 2021.
48 A total of 664 issuers, comprising 580 incorporated in Singapore and 84 incorporated overseas, April 2023.
49 Bain & Company, CDP: Closing the Public-Private Environmental Transparency Gap, May 2022.

15

Recommendations by SRAC(b)

NLCos with annual revenue of at least $100 million to less than $1 billion
a few years after NLCos with at least $1 billion revenue, by around FY2030(estimated 2,200 companies, without considering exemptions).
These companies will come under increasing pressure to report due to the value
chain effect. Those with subsidiaries or branches operating in EU may also be
required to report by FY2028.
We recommend conducting a review by 2027 with a view to mandate CRD on
these companies a few years later, by around FY2030, considering factors suchas international developments, industry capacity and the implementation
experience of NLCos mentioned in paragraph C9(a) above.

C10. The tiered and phased implementation timeline aims to strike a balance
between ambition and market readiness. Spacing out the implementation timeline will
stagger market demand for consultancy and assurance services. It also seeks toprovide adequate time for nation-wide capacity building.
C11. We have used annual revenue as the benchmark criterion as it is a good proxyfor emissions.50 This information is also widely available and consistently prepared, asSingapore-incorporated companies must prepare FS under the prescribed accounting
standards annually. Our proposed revenue thresholds are within the range of thoseused by UK (£500 million), EU (€40 million) and Switzerland (CHF40 million).
C12.

We recommend not to use the following benchmark criterion:(a)industry classification, as NLCos may not classify themselves accurately. It is also
not easy to draw a bright line using industry classification, particularly whencompanies are operating in multiple industries;51(b)

GHG emissions, as not all NLCos are tracking and measuring the data;52(c)employee numbers, as they may not represent the size of a business whereoperations are highly automated or outsourced. It is also difficult to determine
or verify employee numbers as this is not required to be reported in the FS andare accordingly not audited. This is aligned with an earlier consultation on the
proposal to remove this criterion for audit exemption in the CA; and50 Trucost: Frequently Asked Questions – Why are carbon intensities calculated using revenue?, April 2023.
51 SGX RegCo uses the Thomson Reuters Business Classification to determine the industry classification for Listed

Issuers, which is mapped to the TCFD-identified industries.
52 Under the Carbon Pricing Act 2018, only companies with reportable facilities that meet the threshold criteria

report their emissions. The emissions data is reported at the facility level and not at the company level.

16

Recommendations by SRAC(d)total assets, to prioritise companies with a higher level of activity (i.e., proxiedby revenues) before considering asset-heavy companies.

C13. We propose to prioritise companies limited by shares for mandatory reporting.
Foreign branches and companies limited by guarantee will be excluded at this juncture.
Recommendation C1 –(a) Mandate climate reporting on:(i) Listed Issuers from FY2025; and(ii) NLCos limited by shares with annual revenue of at least $1 billion
from FY2027,(b) Conduct a review in 2027 with a view to require climate reporting by
NLCos limited by shares with annual revenue of at least $100 million toless than $1 billion, a few years later, by around FY2030,
subject to the exemptions in Recommendation C2.
Question C1.1 – Do you agree with the above recommendation? Please state thereasons for your response.
Question C1.2 – Aside from international developments, industry capacity and theimplementation experience of NLCos in Recommendation C1(a)(ii), what otherfactors should be considered in deciding the implementation timeline for NLCos in
Recommendation C1(b)? Please state the reasons for your response.
Question C1.3 – Based on your response to Question C1.2, what is the appropriate
timeframe to require mandatory reporting for NLCos in Recommendation C1(b)?
Please state the reasons for your response.
Question C1.4 – Do you agree with the recommendation not to use the benchmark
criterions in paragraph C12 above? Please state the reasons for your response.
Subsidiaries To be Exempted from Full Reporting
C14. To reduce compliance burden, we propose to have an NLCo exempted from
reporting CRD if both conditions are met:(a)

its immediate, intermediate or ultimate parent (local or foreign), determinedaccording to the prescribed accounting standards in Singapore, is minimally
preparing climate or sustainability reports in accordance with the prescribed
CRD in Singapore or deemed equivalent; and(b)

its activities are included in that parent’s report, which is available for public use.

17

Recommendations by SRAC
C15. In EU, a similar exemption is granted to EU-incorporated subsidiaries. In UK, theexemption is restricted to subsidiaries of UK-incorporated parents. The exemption is
not available for joint ventures and associates in EU and UK, likely because these
entities could have different climate strategies and policies from their investors.
C16. No application is necessary for this exemption. The same mechanism has beenused for audit exemption on small companies in the CA.
Recommendation C2 – NLCos will be exempted from mandatory reporting if:(a) its immediate, intermediate or ultimate parent (local or foreign),
determined according to the prescribed accounting standards in
Singapore, is minimally preparing climate or sustainability reports inaccordance with prescribed CRD in Singapore or deemed equivalent; and(b) its activities are included in that parent’s report, which is available forpublic use.
Question C2.1 – Do you agree with the above recommendation? Please state thereasons for your response.
Question C2.2 – If a subsidiary of a foreign parent is exempted from mandatory
reporting as per Recommendation C2, should the subsidiary still be required toreport CRD-prescribed53 disclosures relating to its GHG emissions to the appointed
regulator? Please state the reasons for your response.

53 CRD-prescribed disclosures will mirror the requirements in the ISSB Standards and include:(a) absolute GHG emissions for the reporting period classified as Scope 1, Scope 2 and Scope 3 emissions;(b) for Scope 1 and Scope 2 emissions, disclose emissions separately for (1) consolidated accounting group (theparent and its subsidiaries) and (2) associates, joint ventures, unconsolidated subsidiaries, or affiliates notincluded in (1). Can use either ‘equity share’ or ‘operational control method’, and explain the choice;(c) for Scope 3 emissions, include upstream and downstream emissions and disclose categories included within
measure of Scope 3 emissions;(d) basis for measurement of information provided by entities in value chain, and reason for omission (if any); and(e) explain inputs, assumptions and estimation techniques used to measure GHG emissions, including changes in
estimation techniques, changes in significant assumptions made during the reporting period.

18

Recommendations by SRAC
Ensuring Comparability and Stability when Measuring Size

C17. We recommend applying size threshold of NLCos using company-level
financials, unless it is a parent according to the prescribed accounting standards in
Singapore, in which case, its size will be measured using group-level financials. This
ensures the benchmark criterion is applied to the same reporting entity as the relatedFS, for which CRD is required to be disclosed.
C18. The requirement to use group-level financials applies even when the NLCo is
exempted from preparing consolidated FS. As the NLCo is still a parent according to
the prescribed accounting standards in Singapore, its size should be measured usinggroup-level financials.
C19. Companies’ revenue may fluctuate near the size thresholds. As comparative
information will be reported as part of CRD, it is not ideal for NLCos to report (and be
audited) in one year and not the subsequent year, or vice versa.
C20. To give stability to company’s reporting obligations, we propose to assess thesize threshold based on the financials for two FYs immediately preceding thecurrent FY, unless:(a) the company has not reached its third FY after incorporation, or(b) the company is in the first or second FY when the proposed reporting
obligations commence,in which case, size threshold will be assessed based on the current FY. The same
principle is used in audit exemption criteria for small companies in the CA.54

54 CA: s205C Small company exempt from audit requirements; Thirteenth Schedule – Criteria for Small Company

and Small Group.

19

Recommendations by SRAC
Recommendation C3 – The revenue threshold for NLCo should be measured
using company-level financials,•
unless the NLCo is a parent (according to the prescribed accounting standards
in Singapore),•in which case, revenue should be measured based on group-level financials.
Question C3 – Do you agree with the above recommendation? Please state thereasons for your response.
Recommendation C4 – The revenue threshold for NLCo should be assessed
based on the financials for two FYs immediately preceding the current FY,•
unless the company (i) has not reached its third FY after incorporation, or (ii) isin the first or second FY when the proposed reporting obligations commence,•in which case revenue should be assessed based on the current FY.
Question C4 – Do you agree with the above recommendation? Please state thereasons for your response.

20

Recommendations by SRAC
D. Reporting Standard
D1.
Investors, lenders, insurers and other stakeholders in the financial markets needglobally comparable and relevant information to assess how companies are managing
their climate-related risks and opportunities. Using a common global framework will
facilitate this.
D2.
Our recommendations aim to lay the foundation for international convergence
while managing the reporting efforts for companies required to report. We
recommend introducing as our baseline requirement, the ISSB Standards, which
initially focuses on climate reporting. We also propose to grant at least the same
duration of (temporary) transition reliefs so that the disclosure requirements are
introduced incrementally.
Harmonisation of International Reporting Standards
D3.
A report by the International Federation of Accountants found, whilst 95% oflarge companies report on ESG, 86% used multiple standards and frameworks to doso. This highlights the need for a harmonised, global reporting system.55

D4.
Responding to the growing call for comparable and consistent disclosures, the
ISSB was formed in November 2021. Its mission is to develop a comprehensive global
baseline of sustainability disclosures to meet the needs of investors and financial
markets. In setting its standards, the ISSB will:(a)build on the work of existing investor-focused reporting initiatives such as the
TCFD recommendations; and55 International Federation of Accountants: The State of Play: Sustainability Disclosure & Assurance, February 2023.

21

Recommendations by SRAC(b)progressively include frameworks or standards from two other international
standard setters that IFRS Foundation consolidated in 2022. 56 They include the
CDSB Framework, Integrated Reporting Framework and SASB Standards.

D5.
ISSB’s global baseline concept has been welcomed by the G7 and G2057 leaders,the IOSCO58, and the Financial Stability Board.59“IOSCO is very pleased to see the determined progress being made by
the ISSB in completing this milestone.”−Jean-Paul Servais, IOSCO Board Chair
State of Play in Singapore
D6.
Listed Issuers select a sustainability reporting framework (or frameworks) to
guide their reporting and disclosures. In this regard, the top 50 Listed Issuers by market
capitalisation in Singapore use multiple frameworks concurrently.60 The GRI Standards
was used by almost all (98%), followed by United Nations’ Sustainable Development
Goals (78%), ISO (74%) and TCFD (64%).
D7.
For CRD, Listed Issuers must apply the TCFD recommendations on a ‘comply or
explain’ basis in their sustainability reports for FY2022. Climate reporting using the
TCFD recommendations is progressively made mandatory for Listed Issuers in the five

56 The two standards setters consolidated into IFRS Foundation were Climate Disclosure Standards Board (CDSB),

and Value Reporting Foundation. Value Reporting Foundation was itself formed from the merger of theInternational Integrated Reporting Council and the Sustainability Accounting Standards Board (SASB).
57 Group of Twenty (G20) is the premier forum for international economic cooperation. It plays an important rolein shaping and strengthening global architecture and governance on all major international economic issues. It
comprises 19 countries and EU. The G20 members represent around 85% of the global GDP, over 75% of the global
trade, and about two-thirds of the world population.
IOSCO: IOSCO welcomes the ISSB’s decision to enter into the finalisation phase of its inaugural corporate
sustainability reporting standards, February 2023. IOSCO is the international body that brings together the world’s
securities regulators. It develops, implements, and promotes adherence to internationally recognised standards forsecurities regulations.
58

59 Financial Stability Board promotes international financial stability; it does so by coordinating national financial

authorities and international standard-setting bodies as they work towards developing strong regulatory,
supervisory, and other financial sector policies.
60 From a review conducted by PwC and NUS Centre for Governance and Sustainability (June 2023), Sustainability

Counts II covered 700 listed companies in Asia Pacific which includes top 50 listed companies in Singapore.
Assessment was done based on their latest sustainability reports and annual reports available until January 2023.

22

Recommendations by SRAC
prioritised industries by FY2024.61 Collectively, they accounted for about 60% of total
Listed Issuers.62
Prescribing ISSB Standards as Baseline Requirements
D8.
Given the urgency to combat climate change, the ISSB has begun with athematic standard for CRD alongside an overarching standard on general
requirements for sustainability-related financial disclosures. After incorporating public
feedback into the exposure drafts, the ISSB issued the ISSB Standards in June 2023. To
facilitate adoption, it also provided (permanent) structural reliefs and (temporary)transition reliefs in the ISSB Standards.
D9.
We propose to prescribe (baseline) CRD mirroring the requirements in the
ISSB Standards, to the extent practicable (covered in paragraphs D10 to D14 below),
for mandatory reporting, for the following reasons:(a)given the nexus between financial reporting and sustainability reporting, having
the IFRS Foundation (which the International Accounting Standards Board andthe ISSB are a part of) develop the IFRS accounting standards and the ISSB
Standards could help improve connectedness between both reports;63(b)

the set-up of the ISSB was widely supported during the public consultation, due
to factors such as its robust due process in standard-setting, relationships with
global governance bodies and industries, and expertise in international
standard-setting. Consequently, the ISSB Standards are well placed to gaininternational endorsement, followed by possible global adoption; and(c)the ISSB Standards focus on baseline and build upon the TCFD
recommendations. Listed Issuers which already report based on the TCFD
recommendations will thus be better prepared and have a smoother transition
to climate reporting in accordance with the ISSB Standards. While it is notedthat additional, more granular information (e.g., in relation to governance andstrategy) may be required under the ISSB Standards, the ISSB has also agreed
to provide application support to preparers making use of materials developedby the TCFD.

61 The five prioritised industries are those identified by TCFD to be most affected by climate change, i.e.

(a) issuers in the financial industry, the agriculture, food and forest products industry and the energy industry, areprioritised for mandatory climate reporting from the FY commencing 1 January 2023, and(b) issuers in the materials and buildings industry and the transportation industry, are prioritised for mandatory
climate reporting from the FY commencing 1 January 2024.
62 Based on SGX Stock Screener data as of March 2023.
63 Accountancy Europe: Interconnected Standard Setting for Corporate Reporting, December 2019.

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Recommendations by SRAC
Recommendation D1 – Climate reporting should be prepared using theprescribed (baseline) CRD, which mirror the requirements in the ISSB
Standards, to the extent practicable.
Question D1 – Do you agree with the above recommendation? Please state thereasons for your response.
Making the Prescribed CRD Practicable
D10. To facilitate implementation, the ISSB has introduced a package of (permanent)
structural reliefs and (temporary) transition reliefs in the ISSB Standards. This affords
companies with help and more time to implement processes to adhere to the complex
requirements in the standards, especially for companies with less resources or those
new to climate reporting.

D11. In respect of the (temporary) transition reliefs in the ISSB Standards, werecommend to:(a)apply at least the same duration of reliefs to all companies subject tomandatory reporting.64 For example, if the ISSB grants a one-year relief fromproviding comparative information upon adoption, relief of at least the same
duration will be provided. To illustrate, Listed Issuers are required to provide
comparative information from FY2026, one year after the ISSB-aligned
reporting requirement takes effect under the Listing Rules. Meanwhile, NLCos

64 This means, in the first FY when the proposed reporting obligation commences, companies need not:(a) Provide disclosures about sustainability-related risks and opportunities beyond climate-related information;(b) Provide comparative information;(c) Disclose Scope 3 GHG emissions; and(d) Use the GHG Protocol to measure emissions if they are currently using a different approach.

24

Recommendations by SRAC
with annual revenue of at least $1 billion will be required to provide comparative
information from FY2028;(b)

extend the duration of relief on Scope 3 GHG emissions for NLCos subject
to mandatory reporting. They will be required to make this disclosure two years
after the mandatory reporting requirement takes effect. As NLCos are new toclimate reporting, their requirements should be progressively imposed to givetime for companies to implement processes to measure their Scope 3 GHG
emissions; and(c)review the application of ISSB Standards for disclosure of sustainabilityrelated risks and opportunities beyond CRD for all companies subject tomandatory reporting a few years later, when the scope of mandatory reportingis extended beyond climate reporting.65

D12. We do not propose additional reliefs for the following disclosures, as the ISSB
Standards have catered to varying levels of maturity in climate reporting through(permanent) structural reliefs. In particular, a company is allowed to consider its “skills,
capabilities and resources” when determining an appropriate approach to use for its
climate-related scenario analysis and determining whether it is able to provide
quantitative information about anticipated financial effects of a climate-related risk oropportunity.
D13. Additionally, a company is allowed to use “reasonable and supportable
information that is available to the entity at the reporting date without undue cost oreffort” when fulfilling the following disclosure requirements:
(a)
(b)
(c)
(d)
(e)
(f)

climate-related scenario analysis;
determination of anticipated financial effects of a climate-related risk oropportunity;
measurement of Scope 3 GHG emissions;
identification of climate-related risks and opportunities;
determination of the scope of the value chain; andcalculation of metrics in particular cross-industry metric categories.

D14. Since a company’s specific circumstances will determine what constitutes undue
cost and effort, this flexibility allows it to take a balanced consideration of the costs
and efforts involved in procuring and using information versus the benefits of thedisclosed information to users. Three examples are illustrated below:

65 Listed Issuers will continue to publish sustainability reports in accordance with the Listing Rules.

25

Recommendations by SRACa.

climate-related scenario analysis. Companies can use the pathway in Table 2
to strengthen their disclosures over time.
Table 2: Stages of progression described in guidance published by TCFD 66
Just beginning
Gaining experience
Advanced experience
Qualitative scenario narratives to Scenarios and associatedGreater rigour andhelp management explore theanalysis using quantitative sophistication in the use
potential range of climateinformation to illustrateof data sets andrelated implications, using a
potential pathways andmathematical models tomore focused boundary such as
outcomes, ideally for the
support statistical analysis
a critical business unit or specific entity and its operations
and quantitative, entitycommodity inputs
as a whole
specific outputsb.

determination of anticipated financial effects of significant climate-relatedrisks and opportunities on an entity’s financial position, performance, and cash
flows. Companies can start by providing qualitative information if they areunable to provide quantitative information; andc.

measurement of Scope 3 GHG emissions. If companies are unable to obtain
primary data from their suppliers or other value chain partners, they can use
secondary data to measure their Scope 3 GHG emissions for disclosure.

D15. To improve data availability across the value chain over time, EnterpriseSG willsubsidise the use of pre-scoped carbon accounting solutions under the Productivity
Solutions Grant. These solutions will provide SMEs with affordable solutions to
calculate and manage their GHG emissions.
Recommendation D2 – In respect of (temporary) transition reliefs in the ISSB
Standards, we propose to:(a) apply at least the same duration to all companies subject to mandatory
reporting;(b) extend two-year relief on Scope 3 GHG emissions for NLCos subject tomandatory reporting; and(c) review the application of ISSB Standards for disclosure of sustainabilityrelated risks and opportunities beyond CRD for all companies subject tomandatory reporting a few years later.
Question D2 – Do you agree with the above recommendation? Please state thereasons for your response.

ISSB: Staff Paper - Using scenario analysis to assess climate resilience, January 2023. The three stages ofprogression do not necessarily represent distinct or discrete ‘steps’ in a process. Rather, they provide generaldescriptions of common practice along a continuum of maturity. Consequently, in its efforts to maximise its use ofreasonable and supportable information, an entity’s selected approach may not fall neatly into one stage or another,but rather somewhere in between.
66

26

Recommendations by SRAC
Allow Concurrent Use of Other Standards
D16. Most Listed Issuers are reporting on ESG factors beyond climate-related factors
in their sustainability reports. Some may also operate in jurisdictions that mandate theuse of other standards. Some may tap on funds from investors or lenders that request
the use of other standards as well.
D17. To cater to diverse needs and circumstances, we recommend allowing
disclosures in accordance with other standards and frameworks to be included in thesame report if both conditions are met:(a)(b)

the standards and frameworks applied are prominently disclosed; andthe additional disclosure does not contradict or obscure the information
required by the prescribed CRD.

With this recommendation, companies could prepare one report that complies withmultiple standards and meet different purposes concurrently.
Recommendation D3 – Allow disclosures in compliance with other standards
and frameworks to be included in the same report if both conditions are met:(a) the standards and frameworks applied are prominently disclosed; and(b) the additional disclosure does not contradict or obscure the information
required by the prescribed CRD.
Question D3 – Do you agree with the above recommendation? Please state thereasons for your response.

27

Recommendations by SRAC
E. External Assurance
E1.
Investors, lenders, and insurers need reliable information to make informed
investment, lending, and underwriting decisions. Independent external assurance
increases stakeholders’ confidence on the information reported, thereby upholding
the trust in our capital markets.

E2.
UK does not impose any external assurance requirement on climate reporting.
In contrast, three jurisdictions are mandating or proposing external assurance
requirements to varying degrees:(a)EU and NZ require their in-scope companies to obtain external Limited
Assurance on sustainability or climate reporting at the start. EU imposes therequirement on the entire sustainability report, while NZ imposes therequirement on Scope 1, Scope 2 and Scope 3 GHG emissions. The US Securities
and Exchange Commission is proposing to impose the requirement on Scope 1
and Scope 2 GHG emissions;(b)

The three jurisdictions allow or propose to allow qualified audit and non-audit
firms to register as climate auditors; and(c)

EU has signalled the intention to impose Reasonable Assurance by 2028, whilst
NZ has not committed to a timeline to do so.

E3.
Locally, the level of external assurance remained fairly low. Only 2.8% of our
Listed Issuers had voluntarily obtained external assurance in 2020.67 Listed Issuers are
required to subject their sustainability reporting process to review by their internal
audit functions from 1 January 2022.
67 SGX Group and NUS Centre for Governance and Sustainability: Sustainability Reporting Review 2021, May 2021.

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Recommendations by SRAC
E4.
Our recommendations aim to start the scope of assurance focusing on
disclosures that are important to readers and have well-established methodologies.
We also aim to expand the talent pool, by allowing audit firms and TIC firms to registeras climate auditors. To keep abreast of the rapidly changing developments, signingindividuals are required to attend 40 hours of accredited courses per annum.
Limited Assurance over Scope 1 and Scope 2 GHG Emissions
E5.

We recommend imposing external assurance:(a)

two years after mandatory reporting kicks in. This will allow time forcompanies to be ‘assurance ready’. Climate auditors in Singapore will also needto develop the necessary assurance competencies and apply to be registeredas climate auditors;(b)with the scope of Limited Assurance minimally, rather than Reasonable
Assurance. A Limited Assurance engagement provides a lower level ofassurance than Reasonable Assurance applied to statutory audits of FS. As it
involves fewer tests than in a Reasonable Assurance engagement, it carries
lower costs and compliance burden; and(c)on Scope 1 and Scope 2 GHG emissions at the start. As GHG emissions enable
investors to assess an organisation’s exposure to climate-related risks, these areimportant information. The methodology to compute Scope 1 and Scope 2
GHG emissions provided in the GHG Protocol is also well-established andinvolves fewer estimates.

E6.
Companies are encouraged to voluntarily obtain Reasonable Assurance overthe entire climate report. This is aligned with our recommendation to move towards
Reasonable Assurance covering the entire report (including Scope 3 GHG emissions)as industry capabilities develop over time.
Recommendation E1 – External Limited Assurance should be obtained on
Scope 1 and Scope 2 GHG emissions two years after mandatory reporting, i.e.
•
Listed companies from FY2027; and•NLCos with annual revenue of at least $1 billion from FY2029.
Question E1.1 – Do you agree with the above recommendation? Please state thereasons for your response.
Question E1.2 – In your view, what would be an appropriate timeframe to progress
toward Reasonable Assurance covering:(a) Scope 1 and Scope 2 GHG emissions;29

Recommendations by SRAC(b) Scope 1, Scope 2 and Scope 3 GHG emissions; and(c) the entire CRD?
Please explain your rationale supported by data and analysis where available.
Assurance Provider
E7.
Three jurisdictions that mandated or proposed to mandate external assurance
requirements have allowed for audit firms and non-audit firms to register as climate
auditors:(a)

In EU, climate auditors can either be (i) audit firms or (ii) bodies that meet thesame requirements as audit firms and are accredited by a national accreditation
body.

(b)

In NZ, climate auditors can be audit firms or non-audit firms that are subject toProfessional and Ethical Standards 1 and 3 or other professional requirements,
or requirements in law or regulation, that are at least as demanding.68(c)

In US, it was proposed that climate auditors must have significant experience inmeasuring, analysing, reporting or attesting GHG emissions. In addition, publiccompanies are required to disclose (i) the identity of the assurance providers
and (ii) whether these assurance providers have a licence from any licensing or
accreditation body to provide assurance.

E8.

We have similar practices in Singapore:a.

The National Environment Agency has accredited ten audit firms and TIC
firms as third-party verifiers in respect of the Carbon Pricing Act 2018.69b.

SAC-accredited TIC firms have relevant knowledge and expertise in GHG
emissions standards (e.g., SS ISO 14064-1 and SS ISO 14064-3) andstandards used for sustainability reporting assurance (e.g., International
Standard on Assurance Engagement 3000 Assurance Engagements Other
Than Audits or Reviews of Historical Financial Information andAccountAbility’s AA1000 AccountAbility Principles).

68 Professional and Ethical Standards 1 and 3 refers to International Code of Ethics for Assurance Practitioners(including International Independence Standards) (New Zealand) and Quality Management for Firms that Perform
Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements respectively.
69 Under the Carbon Pricing Act 2018, any industrial facility that emits direct (Scope 1) GHG emissions equal to or

above 25,000 tCO2e are required to obtain Reasonable Assurance by external auditors accredited by NEA(Accredited External Auditor under the Carbon Pricing Act, April 2023).

30

Recommendations by SRAC
E9.
We propose allowing ACRA-registered audit firms and SAC-accredited TIC
firms to become climate auditors. By having a broader pool of assurance providers,
this will keep the talent pool large and keep costs competitive. It will also help meetthe surge in demand for services when the assurance requirement kicks in.
Recommendation E2 – External assurance should be provided by a registeredclimate auditor, which can be either an ACRA-registered audit firm or a SACaccredited TIC firm.
Question E2.1 – Do you agree with the above recommendation? Please state thereasons for your response.
Question E2.2 – Please provide suggestions, if any, on what can be done to enhance
the availability of registered climate auditors to support the increased demand forexternal assurance.
Assurance Standard
E10. Prescribing assurance standards for assurance providers will promote theuniformity and consistency in the assurance process and outcome. It will also focus
capacity-building efforts, with specific guidance issued to mould best practices.
E11. In September 2022, IOSCO expressed support for the ongoing work of the
IAASB to develop profession-agnostic standards, and of the International Ethics
Standards Board for Accountants to create profession-agnostic guidance on ethics
and independence, for the assurance of sustainability-related information.70
E12. To align with global best practices, we recommend that assurance be conductedbased on:(a)

A Singapore standard equivalent to ISSA 5000 General Requirements for
Sustainability Assurance Engagements that is being developed by the IAASB. The
IAASB has brought forward the proposed public consultation to commence by
July 2023, to deliver an assurance framework for FY2024 sustainability
disclosures by market issuers; or(b)

SS ISO 14064-3 Greenhouse gases – Part 3: Specification with guidance for theverification and validation of greenhouse gas statements is adopted asSingapore’s national standard under the purview of the Singapore Standards
Council overseen by EnterpriseSG. SS 1SO 14064-3 is the identical national

70 IOSCO: IOSCO encourages standard-setters' work on assurance of sustainability-related corporate reporting,

September 2022.

31

Recommendations by SRAC
adoption of ISO 14064-3, which is published by the ISO. It is an internationallyrecognised standard specifying the principles and requirements as well as
providing guidance for verifying and validating GHG statements. The standard
is applicable to organisation, project and product GHG statements.
E13. Both standards are developed using a transparent and robust standard-setting
process. They also represent global best practices thus contributing towards a highlevel of credibility on the assurance provided.
Recommendation E3 – Assurance is to be conducted using either:(a) A Singapore standard equivalent to ISSA 5000; or(b) SS ISO 14064-3.
Question E3.1 – Do you agree with the above recommendation? Please state thereasons for your response.
Question E3.2 – What are some key differences between both standards that should
be bridged to enhance consistency in audit procedures?
Registration Criteria for TIC Firms
E14. Climate auditors play an important role in safeguarding the public interest
through providing assurance on CRD. To protect the public interest and keep audit
quality high, it is important to set registration and continuing requirements for climate
auditors, both at firm and individual levels.
E15. Singapore has a robust registration regime for audit firms. Table 3 below
contains the registration requirements. Therefore, we propose to automatically
include ACRA-registered audit firms as climate auditors without the need for
application.
Table 3: Requirements for setting up audit firms and continuing requirements
Criteria
Requirements
Presence
Under control and management of one or more public accountants who are
ordinarily resident in Singapore.
Share capital of the audit firm must be at least $50,000.
Deployment of
If the audit firm has 2 partners, at least 1 must be a public accountant. If the audit
personnel
firm has more than 2 partners, at least two thirds of the partners must be public
accountants.
Indemnity
Covered by one of the following amounts, whichever is the highest:
insurance$1 million;
total of $500,000 for each public accountant; ora sum equal to 2.5 times the gross income of the audit firm in the lastcompleted FY, subject to a maximum sum of $50 million.

32

Recommendations by SRAC
Criteria
Quality
management

Requirements
Audit firms have a responsibility to design, implement and operate a system of
quality management in accordance with Singapore Standard on Quality
Management (SSQM) 1 Quality Management for Firms that Perform Audit or
Reviews of Financial Statements, or Other Assurance or Relates Services
Engagements71 and SSQM 2 Engagement Quality Reviews.

E16. ACRA inspects audit firms’ compliance with SSQM 1 and SSQM 2. TIC firms
accredited by SAC72 are assessed annually as part of a four-year accreditation cycle, toensure their quality management system and technical competencies are maintained.
E17. To safeguard public interests and level the playing field between ACRAregistered audit firms and SAC-accredited TIC firms, we propose to require SACaccredited TIC firms to meet similar requirements as ACRA-registered audit firmsin Table 3 above to qualify as climate auditors, except for quality management,
where they should have the option to obtain equivalent accreditation under ISO/IEC
17029 Conformity assessment – General principles and requirements for validation andverification bodies instead.
Recommendation E4 – To be registered as climate auditors, SAC-accredited TIC
firms are required to meet similar requirements as ACRA-registered audit
firms, except for quality management where they can obtain equivalentaccreditation under ISO/IEC 17029 Conformity assessment – General principles
and requirements for validation and verification bodies.
Question E4.1 – Do you agree with the above recommendation? Please state thereasons for your response.
Question E4.2 – In your views, is ISO/IEC 17029 equivalent to SSQM 1? If not, what
are the gap(s) to be bridged?
Registration and Renewal Criteria for Signing Individuals
E18. Table 4 below sets out the registration criteria for audit partners, which focusessignificantly on qualification, practical experience, and CPE. The qualification pathway

71 For the purposes of SSQM 1, a system of quality management addresses the following eight components: (a) thefirm’s risk assessment process; (b) governance and leadership; (c) relevant ethical requirements; (d) acceptance andcontinuance of client relationships and specific engagements; (e) engagement performance; (f) resources; (g)information and communication; and (h) the monitoring and remediation process.
As the national accreditation body, SAC maintains the integrity and impartiality of conformity assessment
practices. SAC builds global trust in Singapore’s products and services by strengthening our country’s technicalinfrastructure for conformity assessments, as well as forging Mutual Recognition Arrangements with our economic
partners.
72

33

Recommendations by SRAC
for climate auditors is still developing. Coupled with the recommended timeline, itwould generally be difficult to mirror the requirements below for climate auditors.
Table 4: Key requirements for registration as a public accountant
Criteria
Requirements
Qualification
Pass Singapore Chartered Accountant Qualification orrecognised equivalent.
Practical Experience
2,500 hours of requisite qualifying audit experience in the past
five years, inclusive of 1,250 hours in performing key audit
functions (i.e., planning, leading, and reporting) in an audit
management role, under audit principal’s supervision.
CPE and Course on Ethics andMinimum 40 hours of CPE in the past 12 months (which includes
Professional Practice Subjects
minimum hours in specified core expertise areas) andcompletion of Public Practice Programme.

E19. On the other hand, the Carbon Pricing Act 2018 requires the lead verifier tohave held at least a managerial role when performing verification of Scope 1 GHG
emissions on at least three completed verifications with Reasonable Assurance overthe past four years. The lead verifier is required to demonstrate experience andknowledge in planning and conducting verification activities and have specific domain
knowledge.
E20. Whilst the lead verifier in SAC-accredited TIC firms is expected to adhere to
specific personnel competency clauses within the accreditation standards, there are no
registration requirements per se.
E21. Balancing the criteria used for public accountants and for lead verifiers above,
we propose to set the following registration and renewal criteria:(a)Practical experience, covering recency, sufficiency, and relevance of practicalexperience on sustainability reporting assurance.
The individual should have recent, sufficient, and relevant practical experiencein key audit functions (i.e., planning, leading, and reporting) in sustainability
reporting under the supervision of a principal.
The experience should also be acquired minimally in a managerial role toprepare the individual for the important role of safeguarding public interests.

(b)

CPE requirements such as completing a minimum of 40 hours of accredited
courses in the past 12 months. The criterion is more stringent than that currently
imposed on statutory auditors. It is necessary to ensure signing individuals are
kept well abreast of rapidly changing developments in reporting and assurance
standards and practices.

34

Recommendations by SRAC
Recommendation E5 – To register as a qualified signing individual, one must
be able to demonstrate practical experience and meet the CPE requirements
such as completing a minimum of 40 hours of accredited courses in the past 12
months.
Question E5.1 – Do you agree with the above recommendation? Please state thereasons for your response.
Question E5.2 – In your view, should objective measures including hours be
stipulated under the practical experience? If so, how many hours would beappropriate?
One-off Transition of Professionals with Adjacent Competencies
E22. To grow an adequate pool of climate auditors, we propose to allow one-off
transition of professionals with applicable or adjacent competencies:(a)

Individuals equivalent to partner level currently providing sustainability
assurance services under Carbon Pricing Act 2018. This will enlarge the talentpool to practitioners with demonstrated competencies and skillsets; and(b)

ACRA-registered public accountants that have passed the recognised bridging
course(s) to be developed on sustainability reporting and assurance. These
individuals have adjacent competencies. The course is meant to attract thoseindividuals who are willing to invest the time and effort to develop a newcompetency.

35

Recommendations by SRAC
Recommendation E6 – Allow for one-off transition of professionals withapplicable or adjacent competencies to be signing individuals, namely:(a) Individuals equivalent to partner level currently providing sustainability
assurance services under Carbon Pricing Act 2018; and(b) ACRA-registered public accountants that have passed the recognised
bridging courses.
Question E6 – Do you agree with the above recommendation? Please state thereasons for your response.

36

Recommendations by SRAC
F.

Reporting and Filing

F1.
Investors, lenders, insurers, and other stakeholders need to read both climate
reporting and financial reporting information together to make informed decisions. It
is important that both documents are made available at the same time to thesestakeholders.
F2.
Filing CRD in a structured format will enhance its usefulness. This will facilitate
consumption of data and provide consistently categorised information to aid
comparison across industry and time.
Reporting and Filing Timelines
F3.
Listed Issuers are required to publish their sustainability reports within fourmonths after FYE, unless external assurance is obtained on the sustainability report.
In that case, Listed Issuers are given an additional month to publish their sustainability
reports (i.e., five months after FYE).
F4.
UK and NZ require climate reporting to be circulated together with FS toshareholders and tabled at AGM. Their statutory timelines range from four to ninemonths after FYE.73 As for EU, its member states are allowed to set their own
requirements.74

73 UK requires listed companies to circulate and file annual accounts and reports within 6 months after FYE and

NLCos within 9 months after FYE. For NZ, entities subject to mandatory climate reporting are required to circulate
and file both the climate statements and FS within 4 months after FYE.
74 In Germany, FS, and management reports must be circulated without delay after the documents are ready and,in the Netherlands, FS and management reports must be circulated within 4 months after FYE for listed companies
and for other companies, 5 months after FYE.

37

Recommendations by SRAC
F5.
We recommend applying the existing statutory timelines for reporting andfiling of FS to CRD. This will facilitate timely communication to users, thereby
enhancing the usefulness of such information. It will also remove the administrative
burden of circulating materials to shareholders twice. Table 5 below contains thedetails.
Table 5: Proposed timelines for CRD, assurer’s report and director’s statement
Timeline for
Listed Companies
NLCos
AGM is dispensed
Circulate to shareholders
Table at AGM
File for public use

Not less than 14 days
before AGM
Within 4 months
after FYE
Within 5 months
after FYE

AGM is notdispensed
Within 5 months
Not less than 14
after FYE
days before AGM
Within 6 months
after FYE
Within 7 months
after FYE

F6.
If more time is required to prepare CRD, companies can apply for extension oftime to hold their AGM or to file annual returns, as currently done for FS. The timeline
can be extended under valid circumstances.
Recommendation F1 – The existing reporting and filing timelines for FS in the
CA should be applied to CRD, together with the mechanism to apply forextension of time.
Question F1 – Do you agree with the above recommendation? Please state thereasons for your response.
Structured Data Format for CRD
F7.
In September 2022, MAS and SGX Group introduced an integrated disclosure
portal called ESGenome to improve accessibility of ESG data. ESGenome enables Listed
Issuers to upload corporate-level sustainability data, which can be mapped into various
reporting frameworks. To better align users and reporters of ESG information, SGX
Group recommends a list of 27 core ESG metrics for issuers to use.75
F8.
For financial reporting, ACRA requires FS to be filed except for solvent exempt
private companies. The filing is made in (structured) XBRL format, a globally adopted
standard for tagging business and financial reports.76 With XBRL, financial data suchas revenue, profit, and net assets, is categorised uniformly and made readily available

75 SGX RegCo: Consultation Paper on Starting with a Common Set of Core ESG Metrics, August 2021.
76 XBRL refers to eXtensible Business Reporting Language.

38

Recommendations by SRAC
for analysis by the public and private sectors, thereby increasing the usefulness offinancial data filed with ACRA.
F9.
To promote digital consumption, EU will require companies subject tomandatory reporting to file sustainability reports using Inline XBRL technology.77 It isdeveloping a digital taxonomy to allow the reported information to be tagged inaccordance with the European Sustainability Reporting Standards. Switzerland and US
have also announced the intention to require digital filing of climate reports.
The IFRS Foundation is developing an IFRS Sustainability Disclosure
Taxonomy,78 modelled after requirements in the ISSB Standards. The proposed
taxonomy is likely to be issued for consultation by December 2023.
F10.

F11. We recommend requiring CRD to be filed in a digital structured format,
except those for solvent exempt private companies, to be prescribed by the regulators.
This is consistent with the filing of FS. It will enhance the accessibility of climate-related
information, thereby encouraging the use of such information.
Recommendation F2 – CRD should be filed in a digital structured format tofacilitate the consumption of data.
Question F2 – Do you agree with the above recommendation? Please state thereasons for your response.
Location of Disclosures
F12. EU, NZ, and UK have required their companies to make the disclosures inseparate sections of the annual reports. In particular, UK and EU require these
disclosures to be made within the Strategic or Management Reports while NZ requires
disclosures to be made in a separate Climate Statement.
F13. Currently, Listed Issuers are allowed to (a) include sustainability reports in theannual report or (b) include a summary in its annual report and issue a full standalone
sustainability report. About 60% of Listed Issuers opted to issue standalone reports,
according to a 2021 study.79

77 Inline XBRL Technology is an open standard that enables a single document to provide both human-readable

and structured, machine-readable data.
78 In May 2022, IFRS Foundation published the ‘Staff Draft of the IFRS Sustainability Disclosure Taxonomy’, settingout the initial thinking when developing the proposed IFRS Sustainability Disclosure Taxonomy.
79 SGX Group and NUS Centre for Governance and Sustainability: Sustainability Reporting Review 2021, May 2021.

39

Recommendations by SRAC
F14. To accommodate our varied practices, we propose to allow Listed Issuers the
choice to present CRD, either (a) in a separate report or (b) as part of the annual report.
If option (a) is chosen, both reports must be circulated and made available at the sametime.
Recommendation F3 – Listed Issuers can include CRD (a) in a separate report;or (b) as part of the annual report. If CRD is included in a separate report, bothreports must be published at the same time.
Question F3 – Do you agree with the above recommendation? Please state thereasons for your response.

40

Recommendations by SRAC
G. Other Legal Requirements

G1.
To provide investors, lenders, and other stakeholders with credible high-quality
information for their decision making, there is a need to uphold accountability over
CRD.
G2.
Currently, Listed Issuers are required to comply with requirements relating to
TCFD recommendations and filing of CRD in a timely manner. Legal responsibilities
rest with the ‘Relevant Person’, being the issuer, its directors, executive officers andissue managers.
G3.
Internationally, EU, NZ and UK have imposed similar legal responsibilities. In
addition, UK has a legal requirement for tabling of climate reports at AGM. The persons
accountable ranges from the company, its directors and officers.
G4.
To align with our recommendation on reporting and filing timelines, we
propose to apply the same legal requirements on financial reporting to climate
reporting, except for internal controls (covered in paragraphs G6 to G8 below). Table
6 summarises the proposed legal requirements for CRD and the parties responsible.
Table 6: Proposed legal requirements for CRD
Scope of legal requirements(See Appendix B for details)
Keep CRD records
Circulate CRD and climate auditor’s report timely to members
Table CRD at AGM with relevant content

Parties responsible in
the event of default
Company and every
officer in default80
Every director

80 Section 408(3) of CA defines “officer who is in default” or any like phrase as any officer of the company or

corporation who knowingly and wilfully — (a) is guilty of the offence; or (b) authorises or permits the commissionof the offence.

41

Recommendations by SRAC
Scope of legal requirements(See Appendix B for details)
Table climate auditor’s report at AGM timely with relevant content
File CRD, climate auditor’s report and director’s statement timely(not applicable to solvent exempt private companies)
Voluntary revision of defective CRD
Appoint external climate auditors

Parties responsible in
the event of default
Company and every
officer in default
Every director indefault
Company and every
director in default

G5.
The following legal provisions will correspondingly apply when the above
requirements are incorporated in CA:(a)section 157C of CA allows directors to rely on information and advice given byan employee, a professional adviser or expert, or any other director orcommittee of directors if he or she acts in good faith, makes proper inquiry, andhas no knowledge that such reliance is unwarranted;(b)

section 157(1) of CA requires a director at all times acts honestly and uses
reasonable diligence in the discharge of his or her duties; and(c)section 401(2) of CA provides that any person who wilfully makes or authorises
the making of a false or misleading statement can be subjected to a fine of up
to $50,000 or to imprisonment not exceeding two years, or to both.

System of Internal Controls for CRD
G6.
Internal controls are intended to prevent errors and irregularities, identify
problems, and ensure corrective action is taken. In view of their benefits, publiccompanies81 and their subsidiaries are required under CA to devise and maintain asystem of internal accounting controls. In case of default, the company and officer indefault are held responsible.
G7.
EU and UK do not impose any legal requirement to establish and maintain asystem of internal controls specifically for CRD. On the other hand, NZ requires inscope entities to establish and maintain a satisfactory system of control over CRD
records required to be kept. Legal responsibility rests on the entity.

81 Section 4 of CA defines“public company” as a company other than a private company; and“private company” as (a) any company which immediately prior to 29 December 1967 was a private company
under the provisions of the repealed written laws; (b) any company incorporated as a private company by virtue ofsection 18; or (c) any company converted into a private company pursuant to section 31(1), being a company which
has not ceased to be a private company under section 31 or 32.

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Recommendations by SRAC
G8.
At the current juncture, we propose to encourage companies (but not
mandate a legal requirement) to devise and maintain a system of internal
controls specifically for CRD in the CA. To the extent that climate-related
information is contained within the FS of companies, the existing requirements on
internal controls will continue to apply to this information. This requirement should be
re-visited when Reasonable Assurance is imposed on CRD.
Recommendation G1 – The existing legal requirements related to financial
reporting should be imposed on climate reporting, except for internal controlsthat should be encouraged.
Question G1.1 – Do you agree with the above recommendation? Please state thereasons for your response.
Question G1.2 – In terms of sanctions, should climate reporting be placed on equal
footing with financial reporting at this juncture? Please explain your rationale.
Legal Responsibility to Apply When Filing Voluntarily
G9.
Companies not subject to mandatory CRD reporting are free to decide thescope and extent of disclosures, which could differ significantly from those to bereported by companies subject to mandatory reporting. For example, if a different
framework is used, the CRD may not be complete or comparable to users of theinformation.
G10. To facilitate comparability among filed climate reports, we propose to allow
these companies to voluntarily file CRD only when their CRD complies with theprescribed CRD. Such filing can be accepted, even if external Limited Assurance has
not been obtained.
G11. We also propose for the legal requirements covered in paragraphs G4 and G5
to correspondingly apply on these companies upon voluntary filing. With the inclusion,
the regulator can uphold the quality and reliability of CRD filed for public use.
Recommendation G2 – Companies not subject to mandatory reporting canvoluntarily file their climate reporting if they have prepared it in accordancewith the prescribed CRD. The applicable legal requirements will apply upon
filing.
Question G2 – Do you agree with the above recommendation? Please state thereasons for your response.

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Recommendations by SRAC
Directors’ Voluntary Revision of Defective CRD
G12. For financial reporting, CA has a provision to allow directors to voluntarily
correct errors at an earlier opportunity than in the next year’s FS.82 This process is
simpler, as compared to the alternative of expunging accounting records throughcourt. As a safeguard, the revised FS must be circulated to shareholders within 30 days
after revision date and tabled at the next general meeting held after revision date.
G13. We propose to avail the same provision for climate reporting, with the same
safeguard. In view of the nascent stage of climate reporting for most companies, errors
may be made and identified shortly after reporting. Directors should be provided amechanism to rectify these errors expeditiously, while keeping shareholders informed.
Recommendation G3 – Provide the mechanism for directors to voluntarily
revise defective CRD, with the same safeguard as for financial reporting.
Question G3 – Do you agree with the above recommendation? Please state thereasons for your response.

82 Section 202A(2) of CA states — Where this section applies, if it appears to the directors of the company that thefinancial statements or, in the case of a parent company, consolidated financial statements or balance sheet do notcomply with the requirements of this Act (including compliance with the Accounting Standards), the directors may
cause the financial statements, or consolidated financial statements or balance sheet (as the case may be), to berevised and make necessary consequential revisions to the summary financial statement or directors’ statement.

44

List of Recommendations
Companies Required to Report
C1(a) Mandate climate reporting on:(i) Listed Issuers from FY2025; and(ii) NLCos limited by shares with annual revenue of at least $1 billion from FY2027,(b) Conduct a review in 2027 with a view to require climate reporting by NLCos limited byshares with annual revenue of at least $100 million to less than $1 billion, a few years
later, by around FY2030,
subject to the exemptions in Recommendation C2.
C2

NLCos will be exempted from mandatory reporting if:(a) its immediate, intermediate or ultimate parent (local or foreign), determined according
to the prescribed accounting standards in Singapore, is minimally preparing climate
or sustainability reports in accordance with prescribed CRD in Singapore or deemed
equivalent; and(b) its activities are included in that parent’s report, which is available for public use.

C3

The revenue threshold for NLCo should be measured using company-level financials,• unless the NLCo is a parent (according to the prescribed accounting standards in
Singapore),• in which case, revenue should be measured based on group-level financials.

C4

The revenue threshold for NLCo should be assessed based on the financials for two FYs
immediately preceding the current FY,• unless the company (i) has not reached its third FY after incorporation, or (ii) is in thefirst or second FY when the proposed reporting obligations commence,• in which case revenue should be assessed based on the current FY.

Reporting Standard
D1
Climate reporting should be prepared using the prescribed (baseline) CRD, which mirror
the requirements in the ISSB Standards, to the extent practicable.
D2

In respect of (temporary) transition reliefs in the ISSB Standards, we propose to:(a) apply at least the same duration to all companies subject to mandatory reporting;(b) extend two-year relief on Scope 3 GHG emissions for NLCos subject to mandatory
reporting; and(c) review the application of ISSB Standards for disclosure of sustainability-related risks
and opportunities beyond CRD for all companies subject to mandatory reporting a
few years later.

D3

Allow disclosures in compliance with other standards and frameworks to be included in
the same report if both conditions are met:(a) the standards and frameworks applied are prominently disclosed; and(b) the additional disclosure does not contradict or obscure the information required by
the prescribed CRD.

External Assurance
E1
External Limited Assurance should be obtained on Scope 1 and Scope 2 GHG emissions
two years after mandatory reporting, i.e.
• Listed companies from FY2027; and• NLCos with annual revenue of at least $1 billion from FY2029.
E2

External assurance should be provided by a registered climate auditor, which can be either
an ACRA-registered audit firm or a SAC-accredited TIC firm.

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List of Recommendations
E3

Assurance is to be conducted using either:(a) A Singapore standard equivalent to ISSA 5000; or(b) SS ISO 14064-3.

E4

To be registered as climate auditors, SAC-accredited TIC firms are required to meet similar
requirements as ACRA-registered audit firms, except for quality management where they
can obtain equivalent accreditation under ISO/IEC 17029 Conformity assessment – Generalprinciples and requirements for validation and verification bodies.

E5

To register as a qualified signing individual, one must be able to demonstrate practicalexperience and meet the CPE requirements such as completing a minimum of 40 hours ofaccredited courses in the past 12 months.

E6

Allow for one-off transition of professionals with applicable or adjacent competencies tobe signing individuals, namely:(a) Individuals equivalent to partner level currently providing sustainability assurance
services under Carbon Pricing Act 2018; and(b) ACRA-registered public accountants that have passed the recognised bridging
courses.

Reporting and Filing
F1
The existing reporting and filing timelines for FS in the CA should be applied to CRD,
together with the mechanism to apply for extension of time.
F2

CRD should be filed in a digital structured format to facilitate the consumption of data.

F3

Listed Issuers can include CRD (a) in a separate report; or (b) as part of the annual report.
If CRD is included in a separate report, both reports must be published at the same time.

Other Legal Requirements
G1
The existing legal requirements related to financial reporting should be imposed on
climate reporting, except for internal controls that should be encouraged.
G2

Companies not subject to mandatory reporting can voluntarily file their climate reporting
if they have prepared it in accordance with the prescribed CRD. The applicable legal
requirements will apply upon filing.

G3

Provide the mechanism for directors to voluntarily revise defective CRD, with the same
safeguard as for financial reporting.

46

Appendix A: About SRAC
The SRAC comprises 15 members from diverse backgrounds, including directors, chiefsustainability officers, sustainability reporting professionals, representatives offinancial institutions, investors, and academia:
Members
Ms Esther An(Chairperson)
Mr Bey Soo Khiang
Ms Chan Yen San
Mr Chia Ko Wen
Ms Fang Eu-Lin

Ms Grace Goh Bee
Kheng
Mr Brian Ho Chi
Kuen
Mr Koh Chin Beng
Mr Koh Yeong
Kheng
Professor Lawrence
Loh
Mr Max Loh
Mr Uantchern Loh
Mr Kevin John
Monteiro
Mr Helge Muenkel
Mr Shinbo Won

Designation
Chief Sustainability Officer, City
Developments Limited
Vice-Chairman, Royal Golden Eagle
Group
Partner, KPMG in Singapore
Head of Sustainability, Singlife with
Aviva
Partner and Sustainability and Climate
Change Practice Leader, PwC
Singapore
Managing Director, Finance; Head,
Investment Services, Temasek
International Pte. Ltd.
Partner, Climate & Sustainability
Assurance Leader for Asia Pacific andSoutheast Asia, Deloitte Singapore
Partner, Risk Advisory Services, BDO
SingaporeDirector (Finance), Straits Construction
Group Pte Ltd
Director, Centre for Governance andSustainability, NUS Business School
Former Managing Partner, EY Asean,
Singapore & Brunei
Chief Executive Officer, Asia Pacificregion, Black Sun
Executive Director and Chief Financial
Officer, Japfa Ltd
Chief Sustainability Officer, DBS
Managing Director, Head of Asia exJapan, BlackRock Investment
Stewardship, BlackRock

Represents
Life Insurance Association andGeneral Insurance Association
Institute of Singapore Chartered
Accountants’ Sustainability andClimate Change Committee--

Institute of Internal Auditors
Association of Small & Medium
Enterprises
Singapore Institute of Directors
Securities Investors Association(Singapore)
SGListCos Association
Green Finance Industry
Taskforce
Investment Management
Association of Singapore

47Appendix B: Legal Requirements
Proposed legal requirements
1. Keeping of CRD records
Keep records:- that will enable company to prepare CRD that comply with theprescribed CRD requirements;- for period of not less than 5 years after FYE; and- in Singapore, and at all times open to inspections by directors.
2.

Circulate CRD and climate auditor’s report timely to members- CRD and climate auditor’s report are circulated to members:(i) not less than 14 days before AGM, unless AGM is dispensed with(for private company only); and(ii) if AGM is dispensed with, documents are circulated to members
not later than 5 months after FYE.
- If any member or climate auditor sends notice not later than 14 days
after documents are circulated requiring AGM to be held, AGM mustbe held within 14 days after receiving the request.

Parties responsible
Company and every
officer in default

Company and every
officer in default

Every director
default

in3.

Table CRD at AGM with relevant content- CRD comply with prescribed CRD requirements, unless exempted by
the regulator; and- Table CRD for shareholders’ approval at AGM, unless AGM isdispensed with (for private company only).

Every director

4.

Table climate auditor’s report at AGM timely with relevant content- CRD are assured not less than 14 days before AGM;
- Climate auditor’s report contains required information; and- Climate auditor’s report is tabled for shareholders’ approval at AGM.

5.

File CRD, climate auditor’s report and directors’ statement timely
for public use- CRD, climate auditor’s report and directors’ statement are filed withthe regulator:(i) within 5 months after FYE (for listed company); and(ii) within 7 months after FYE (for NLCos);
unless the regulator grants extension of time upon application.

Company and every
officer in default

6.

Voluntary revision of defective CRD- Revised CRD are tabled at the next general meeting held afterrevision date.

Every director
default

7.

Appoint independent and competent external climate auditors- Appoint external climate auditors who are:(i) independent and competent; and(ii) registered with the regulator
to assure Scope 1 and Scope 2 GHG emissions.

Company and every
director in defaultin48