Rationale for Delaying Climate Reporting Requirements for SMEs Listed on SGX
Ministry of FinanceSpeakers
Summary
This question concerns Ms He Ting Ru’s inquiry regarding the rationale for granting small and mid-sized companies listed on the SGX a five-year extension for climate reporting requirements. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong explained that smaller firms require more time to develop capabilities for International Sustainability Standards Board-based (ISSB-based) reporting compared to larger enterprises. The extension considers the challenging global economic environment and the early stage of worldwide ISSB adoption to maintain Singapore's business competitiveness. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong highlighted that the Government will provide capacity-building for directors and practitioners to ensure high-quality climate reporting. This approach supports Singapore's 2050 net-zero target by helping companies transition to sustainable practices while remaining globally competitive.
Transcript
86 Ms He Ting Ru asked the Prime Minister and Minister for Finance what is the rationale for delaying climate reporting requirements for small and mid-sized companies listed on the SGX by five years when the proposed extension by the Singapore Business Federation is one to two years.
Mr Gan Kim Yong (for the Prime Minister): Supporting companies in their climate reporting journey is one component of the Singapore Government's plan to reach net zero by 2050.
Prior to announcing the changes to its climate reporting requirements, the Singapore Exchange (SGX) Regulation conducted a series of reviews, focus groups and surveys to assess listed companies' readiness for International Sustainability Standards Board-based (ISSB-based) climate reporting. The Singapore Business Federation's recommendation was one of the sources of feedback considered by SGX Regulation and the Accounting and Corporate Regulatory Authority (ACRA).
The feedback suggested that companies had made progress in their climate reporting capabilities. However, small- and medium-sized companies that are less well-equipped compared to larger enterprises, will need more time to develop their capabilities to fulfil ISSB-based climate reporting requirements. We are also mindful that many of our businesses are currently facing a more challenging operating environment due to global economic headwinds. It is important to ensure that imposing the new ISSB reporting standards will not undermine our competitiveness versus other jurisdictions.
As ISSB-based climate reporting is at an early stage of adoption worldwide, the five-year extension provides time for smaller listed companies to prepare themselves to meet the higher standards. This includes developing robust processes to collect key information and critical data points to produce quality climate reporting.
We want our companies to be greener and more sustainable and ensure they remain globally competitive. The Government will continue to work with the industry to support companies in their climate reporting journey, including capacity-building for directors, senior management and practitioners.