Singapore Takes Bold Step Towards Sustainability: Mandatory Climate Reporting from 2025

In a groundbreaking move, Singapore has announced the implementation of mandatory climate-related reporting for listed and large non-listed companies, aligning with the International Sustainability Standards Board (ISSB) standards set by the International Financial Reporting Standards (IFRS). This transformative initiative, spearheaded by Second Minister for Finance Chee Hong Tat, is poised to reshape corporate transparency and sustainability practices.

Key Points of the Announcement:
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1. Phased Implementation: The mandatory climate reporting will be rolled out in phases, commencing with listed companies in 2025 and extending to large non-listed entities in 2027. This phased approach ensures a smooth transition, allowing companies to adapt to the new reporting obligations.
2. Emission Scope Coverage: Reporting obligations will progressively encompass Scope 1, 2, and 3 emissions. This comprehensive coverage reflects a commitment to a holistic understanding of a company's environmental impact. Listed companies will be subject to external assurance requirements after two years, adding an extra layer of credibility to the reported data.
3. Potential Expansion to Smaller Companies: A government review will evaluate the possibility of extending these reporting obligations to smaller companies. This forward-looking approach demonstrates Singapore's commitment to universal sustainability practices, irrespective of a company's size.
4. Supportive Measures: Recognizing the significance of this transition, the Ministry of Trade and Industry (MTI) is set to announce specific measures to aid companies in developing sustainability reporting and assurance competencies. This signifies a proactive effort to support businesses in meeting the new requirements effectively.

Relevance of the News:
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1. Enhances Transparency:

• Mandatory reporting serves as a catalyst for transparency in corporate sustainability practices. This move is expected to foster trust among stakeholders, including investors, customers, and the public.

2. Access to Capital:

• As a pivotal financial hub in Asia, Singapore's decision to enforce climate reporting standards sends a strong signal to businesses. Compliance with these standards is likely to enhance access to new markets, attract environmentally conscious customers, and facilitate sustainable financing opportunities.

3. Regulatory Alignment:

• Following the footsteps of Europe and several other regions that have embraced mandatory reporting, Singapore's alignment with international standards positions it as a global business hub. This fosters consistency in reporting practices across jurisdictions, reinforcing Singapore's commitment to global sustainability goals.

Singapore's bold move towards mandatory climate reporting is a testament to its dedication to environmental stewardship and a sustainable future. As businesses prepare for this paradigm shift, the nation sets the stage for a new era of corporate responsibility and accountability.

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