Are local businesses ready for mandatory climate reporting?

Last year, Singapore announced that all listed companies must report Scope 1 and Scope 2 emissions from the financial year 2025. Non-listed companies were given more time: until either 2028 or 2030, depending on size. This extended window offers non-Straits Times Index (non-STI) companies two years to align their internal processes with the new regulatory standards. As we reach the end of this first year of mandatory reporting, the Institute of Singapore Chartered Accountants (ISCA), PwC and SGX RegCo released a new study, to assess the readiness of local companies for the sustainability disclosures. Titled Trust in Transition: Building Confidence in Sustainability Disclosures, the study’s findings observed that STI companies are, on the whole, well prepared, while smaller firms face structural and capacity challenges.

As Singapore’s largest and best-resourced listed companies, constituents of the Straits Times Index (STI) have adjusted to the new requirements. Many have in-house internal audit teams, with 57% already obtained external assurance over sustainability-related information.

However, non-STI companies show uneven progress. Larger non-STI firms with a market capitalisation above S$1 billion have until 2028 to prepare, while the rest must do so by 2030. Only 29% of non-STI companies above S$1 billion have obtained external assurance, and among the remaining smaller non-STI constituents, only 7% have done so. Three in four smaller firms outsource their internal audit functions, and nearly half still rely on manual tools such as spreadsheets for data collection. These manual processes actively impeded the data collection process, with the study reporting a reduced frequency of data collection in smaller non-STI constituents. Given this state, the report stresses that early preparation is necessary and that companies would benefit from organising their reporting processes ahead of the deadline.

Many STI companies have introduced ESG training programmes covering climate reporting skills and ways to integrate ESG into strategy and operations. However, smaller companies have not adopted similar efforts, and when they do, only about half consider their training adequate. The study highlights the need for more structured and consistent capacity building, particularly for firms unfamiliar with the finer points of emerging reporting standards.

To support this transition, ISCA’s Sustainability and Climate Change Committee and SGX RegCo introduced a Climate Reporting Roadmap alongside the study, offering non-STI companies a structured approach to strengthen internal systems ahead of the deadlines and breaks down disclosure requirements into manageable parts. ISCA has also released guidelines for Social Impact Metrics in Corporate Sustainability Reporting, signalling greater attention to the social dimension of ESG.

Ultimately, the study encourages companies to view climate-reporting not merely as regulatory compliance, but as a chance to build resilience and competitiveness. For companies that operate in Southeast Asia, where climate change is strongly affecting our surroundings (look no further than rising temperatures and increasingly intense tropical storms!), strong sustainability practices can enhance both reputation and long-term value. For firms willing to invest early and intentionally, the shift towards assured disclosures is an opportunity to future-proof their place in the market.