SBF makes four recommendations to enhance the quality, efficiency and comparability of ISSB-based climate-related disclosure in Singapore following feedback from smaller listed companies

Under Singapore Exchange Regulation’s (SGX RegCo) prevailing sustainability reporting regime, all SGX-listed companies (ListCos) are required to make climate-related disclosures for financial years (FY) commencing on or after 1 January 2025 using the International Sustainability Standards Board (ISSB) standards (“ISSB disclosure”).

Between April and May 2025, the Singapore Business Federation (SBF) and SGX RegCo engaged close to 40 ListCos from the Mainboard and Catalist boards through a roundtable and survey to understand their level of preparedness to meet the mandatory climate reporting requirements. 

Even though all the engaged ListCos are in progress of preparing for ISSB disclosures, only 4% are very confident in meeting the timeline. Citing challenges such as incomplete understanding of disclosure requirements, lack of time and resources to build internal capabilities, having to set up robust data collection processes to fulfil the more detailed and extensive reporting requirements – more than 90% said extending the timeline for mandatory ISSB disclosures, for example by one or two years, would be useful for them to prepare higher quality ISSB reports. Critically, they said that any time extension will not detract them from the preparation work that they have started.

Based on the consolidated feedback from ListCos, SBF proposes four recommendations to improve the robustness and enhance the comparability of ISSB disclosures in Singapore, specifically for small- and mid-cap ListCos, which account for 84% (521 out of 618) of listings on SGX.  The recommendations are:

1. Grant small- and mid-cap ListCos more time to comply, for example, by one to two years;
2. Make disclosure requirements proportionate for small- and mid-cap ListCos;
3. Provide Singapore-relevant cross-sector and sector-specific guidance; and
4. Designate a central platform for digital reporting of climate-related disclosures.

Grant small- and mid-cap ListCos more time to comply

Unfamiliarity with the ISSB reporting requirements, which are significantly more detailed and extensive than the Task Force on Climate-related Financial Disclosures (TCFD) framework, places disproportionate pressure on smaller and less-resourced entities, making meaningful compliance highly challenging. This is further compounded by the current global business environment, where companies are grappling with heightened uncertainty due to geopolitical tensions and trade tariffs. These external pressures require attention and resources from companies, making it challenging for smaller ones to adopt ISSB disclosure at this time.

While preparations for ISSB climate reporting is underway, a deadline extension would enable small- and mid-cap ListCos to deepen internal capabilities (including preparing subsidiaries which may be based overseas); strengthen data collection systems (including refining data collection templates and ensuring data completeness and accuracy); and take guidance from the FY2025 ISSB reports by larger ListCos to produce higher quality reports.

Extending the deadline would also enable small- and mid-cap ListCos to be eligible for the Sustainability Reporting Grant (SRG) by the Economic Development Board (EDB) and Enterprise Singapore (EnterpriseSG) as SRG is only applicable for reports before compliance for mandatory climate-related disclosures sets in.

Make disclosure requirements proportionate for small- and mid-cap ListCos

The engaged ListCos expressed that it was quite an imposition for them to be held to the same disclosure standards as larger ListCos given their more limited resources. 

Sustainability reporting obligations ought to be proportional to the size and resources of each company, while continuing to promote credible, decision-useful disclosures across all ListCos. Although ISSB standards incorporate built-in proportionality mechanisms, this may not be well understood by smaller ListCos.  More can be done to increase awareness and application of the proportionality mechanisms for small- and mid-cap ListCos.

Provide Singapore-relevant cross-sector and sector-specific guidance

Smaller ListCos expend significant time and effort to research and report on specific ISSB requirements such as climate scenarios and underlying assumptions used for analysis which are duplicative across companies and therefore collectively inefficient. They may also reduce consistency and comparability of the disclosures.

A national-level single source of truth (SSOT) for cross-sector and sector-specific guidance that smaller ListCos can use will reduce the compliance burden. For instance, a common set of climate-related scenarios – aligned with the latest climate science – could be ‘pre-selected’ for small- and mid-cap ListCos to assess their climate resilience. Reference material or templates could also be developed for Singapore-localised skills and competencies for climate governance, as well as management of physical risks (e.g. heat, rainfall, sea level rise) and transition risks (e.g. policy, market). 

Designate a central platform for digital reporting of climate-related disclosures

Financial data is centralised today on platforms such as SGX’s Stock Screener. This enables analysts to easily obtain company-specific and sector-specific data for metrics such as Price/Earnings ratio and Dividend Yield, and benchmark these against sectoral averages for meaningful analysis. However, there is hitherto no central repository for sustainability data.  A central platform which hosts reliable sustainability data in a standardised format for Singapore companies will facilitate national- and sectoral-level benchmarking for meaningful analysis and decision-making.

Mr Kok Ping Soon, Chief Executive Officer of SBF, said, “SBF recognises the value of companies making ISSB-based climate-related disclosure.  Doing so compels companies to formulate, communicate and implement strategies and processes to enhance their resilience against climate risks and to seize opportunities in our transition towards a low-carbon future. It is encouraging that small- and mid-cap ListCos have started preparing for these disclosures, though many continue to face practical barriers — including method (e.g. incomplete understanding of disclosure requirements) and manpower (e.g. lack of time and resources to build internal capabilities). After engaging close to 40 small- and mid-cap ListCos, our key recommendation is to extend their compliance deadline. This does not represent a step back from Singapore’s climate reporting ambitions, but is a practical measure to provide smaller ListCos more time to strengthen internal readiness and incorporate best practices after larger ListCos make their ISSB disclosures for FY2025.  In addition to compliance extension, we also recommend increasing awareness and application of proportionality mechanisms, providing more guidance, and designating a central data platform. These will help smaller ListCos take full advantage of any compliance deadline extension to more effectively transition their business.” 

As Singapore’s apex business chamber, SBF is committed to working closely with ISSB disclosure stakeholders – including further engagement with regulators like SGX RegCo and the Accounting and Corporate Regulatory Authority (ACRA), trade associations and chambers (TACs), training institutes, as well as other government agencies like EnterpriseSG – to shape solutions, build partnerships, and foster capabilities within the Singapore business community to prepare for climate-related risks and opportunities.

Please refer to the Annex - International Sustainability Standards Board (ISSB)-based climate-related disclosure for smaller listed companies for more details on the recommendations.