Singapore moves forward with mandatory climate reporting – implications for U.S.-based multinationals

Amidst the uncertain future of U.S. climate reporting rules, other jurisdictions continue to move forward with climate reporting requirements that will impact U.S.-based multinationals.

Last year, we posted about Singapore’s public consultation on the climate disclosure recommendations of the Sustainability Reporting Advisory Committee (SRAC) set up by the Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation (SGX RegCo). Following consideration of the feedback from the consultation, ACRA and SGX RegCo recently accepted SRAC’s recommendations, with some refinement. In parallel, the Second Minister for Finance announced that Singapore will introduce mandatory climate-related disclosures in a phased approach, in line with the final accepted recommendations.

Aspects of the requirements that are relevant to larger U.S.-based multinationals operating in Singapore are discussed below. Note that earlier compliance is required for Singapore-listed issuers (those requirements are not discussed in this post). 

• Mandatory climate reporting by large non-listed companies will start with fiscal 2027. Large non-listed companies are those with annual revenue of at least $1 billion Singapore dollars (approximately U.S.$750 million) and total assets of at least S$500 million (approximately U.S.$375 million). The revenue and asset thresholds are to be assessed based on the financial statements for the two fiscal years preceding the then-current fiscal year. 

ACRA has indicated that around 2027 it will conduct a review of the experience of reporting companies with a view to potentially lowering the threshold to include additional non-listed companies. The review is expected to consider, among other things, international developments, industry capacity and the implementation experience of non-listed companies. 

• A large non-listed company will be exempt from climate reporting if:
  • Its immediate, intermediate or ultimate parent (local or foreign) prepares climate or sustainability reports in accordance with prescribed Singapore requirements or a regime that is deemed equivalent (e.g., the European Sustainability Reporting Standards; the U.S. SEC’s climate rules, which were adopted after publication of the ACRA/SGX RegCo response, are not mentioned);
  • The large non-listed company’s activities are included in the parent report; and
  • The report is publicly available.
• If the climate or sustainability report is prepared in accordance with other international standards and frameworks such as the Global Reporting Initiative Standards or the Recommendations of the Task Force on Climate-Related Financial Disclosures, the large non-listed company will be exempted from reporting and filing climate-related disclosures with ACRA for a transitional period of three years, from fiscal years 2027 to 2029. ACRA plans to review whether to extend the transitional period, depending on global developments relating to the adoption and recognition of other standards and frameworks.
• Beginning with fiscal year 2027, large non-listed companies generally will be required to report International Sustainability Standards Board-aligned climate-related disclosures (with any local variations adopted by Singapore), including Scope 1 and 2 greenhouse gas emissions. However, large non-listed companies will not be required to report Scope 3 GHG emissions earlier than fiscal year 2029. ACRA has indicated that it will provide at least two years’ notice for large non-listed companies to prepare for Scope 3 reporting.
• Beginning with fiscal year 2029, large non-listed companies will be required to obtain external limited assurance on Scope 1 and 2 emissions. The limited assurance will need to be provided by an ACRA-registered audit firm or a Testing, Inspection, Certification firm accredited by the Singapore Accreditation Council, the national accreditation body that manages and promotes accreditation schemes and registration programs.
• Climate reporting will have the same reporting and filing timelines as financial statements. 
• Legal responsibilities will be imposed on reporting companies, their directors and/or officers to ensure the legal requirements for reporting are complied with, including the following:
  • Keeping record of climate-related disclosures;
  • Circulating the climate-related disclosures, climate auditor’s report and director’s statement to members in a timely fashion and tabling such documents for approval at the annual general meeting;
  • Filing the climate-related disclosures, climate auditor’s report and/or director’s statement with the relevant regulator(s);
  • Revising a defective climate-related disclosure and, as a safeguard, tabling the revised climate-related disclosure at the next general meeting after the revision date; and
  • Appointing independent and competent climate auditors.

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