Key Takeaways:
- SGX sustainability reporting helps listed companies communicate their ESG performance, material risks, policies, targets, and governance approach more clearly.
- The reporting regime is becoming more structured, with a stronger emphasis on climate-related disclosures and greenhouse gas emissions.
- This shift helps investors compare companies more consistently and assess their exposure to transition, regulatory, operational, and market risks..
Introduction
Sustainability reporting has become a critical part of corporate governance and strategic communication in Singapore. The Singapore Exchange (SGX) requires listed companies to disclose their Environmental, Social, and Governance (ESG) performance, providing transparency that is increasingly valued by investors.
For Singapore-listed companies, SGX sustainability reporting provides a structured framework for disclosing ESG performance, climate-related risks, and sustainability priorities. These disclosures help investors understand how a company manages risk, responds to regulatory expectations and prepares for future market conditions.
What Is SGX Sustainability Reporting?
It is a structured method for listed companies to communicate their ESG initiatives, performance and impacts. It is intended to promote transparency, accountability and trust among investors, stakeholders and the wider market.
These reports typically cover the company’s material ESG factors, policies, practices, performance indicators and targets. They may also reference internationally recognised frameworks such as the Global Reporting Initiative, the Sustainability Accounting Standards Board, and climate-related disclosure standards developed by the International Sustainability Standards Board.
For investors, this structure is important because it makes sustainability information easier to assess. Rather than treating ESG as a broad statement of intent, investors can review how a company identifies material risks, measures performance and explains its approach to governance and accountability.
How the SGX Sustainability Reporting Regime Has Shifted from Broad ESG Reporting to More Structured Climate Disclosure
SGX reporting was originally built around broader reporting principles such as materiality, stakeholder inclusiveness, sustainability context and completeness. These principles remain important because they guide companies in deciding what to disclose and how to present meaningful information.
However, the reporting regime has become more specific, especially regarding climate disclosure. Listed companies are now expected to provide more standardised climate-related information, including greenhouse gas emissions and disclosures aligned with the International Sustainability Standards Board (ISSB) requirements.
This shift matters to investors because it reduces ambiguity. When companies disclose climate-related data under clearer, more consistent requirements, investors are better able to compare issuers, assess transition risks, and understand how prepared each company is for changing regulatory, operational, and market pressures.
What Listed Companies Must Now Disclose and Why Investors Should Pay Attention
From FY2025, all listed companies must report Scope 1 and Scope 2 greenhouse gas emissions. Scope 1 emissions refer to direct emissions from sources owned or controlled by the company, while Scope 2 emissions relate to indirect emissions from purchased energy.
From FY2026, Straits Times Index (STI) constituents must also report Scope 3 emissions. These cover indirect emissions across the value chain, such as purchased goods, logistics, business travel, product use or other upstream and downstream activities. For other non-STI-listed companies, Scope 3 reporting remains voluntary until further notice.
Other ISSB-based climate-related disclosures are mandatory from FY2025 for STI constituents. For non-STI issuers, requirements are phased according to market capitalisation tiers. Investors should pay attention to these timelines because reporting readiness can reveal how mature a company’s internal data systems, governance processes and risk management practices are.
How More Structured Disclosure Improves Investor Analysis
For investors, sustainability information is useful only when it supports comparison, interpretation and decision-making. More structured disclosure helps investors move from general ESG impressions to more evidence-based analysis.
Mandatory Scope 1 and Scope 2 emissions reporting gives investors a clearer basis for assessing a company’s operational emissions profile. Where Scope 3 emissions are disclosed, investors gain broader insight into value chain exposure and transition risk.
Climate-related disclosure also helps investors assess whether sustainability risks are being considered at board and management levels. Information on governance, strategy, risk management, metrics and targets can be reviewed alongside financial statements, annual reports and other market disclosures.
Why Timing, Assurance, and Reporting Discipline Matter to the Market
Reporting quality is not only about what is disclosed. It is also about when the report is issued, how data is prepared and whether the information can be relied upon.
SGX generally expects sustainability reports to be issued with the annual report, although issuers that obtain external assurance may have additional time, subject to applicable rules. This timing matters because investors often assess financial and sustainability information together.
At the same time, external limited assurance for Scope 1 and Scope 2 emissions has been deferred for listed companies until FY2029. This means Singapore is in a transition period in which disclosure requirements are becoming stronger, while assurance expectations continue to evolve.
What are the Key Reporting Requirements?
SGX guidelines emphasise four reporting principles: materiality, stakeholder inclusiveness, sustainability context and completeness. These principles help companies decide which ESG matters to include and how to explain them.
This is where sustainability data increasingly intersects with accounting, governance and financial analysis. Companies that already use financial accounting advisory services may find it easier to align sustainability information with internal controls, financial reporting timelines and investor communication.
Advisory support can also help companies review emissions data controls, establish clearer audit trails, and prepare for future assurance requirements. As sustainability reporting becomes more structured, these functions can help businesses produce disclosures that are compliant, reliable, and useful for investor decision-making.
Materiality is especially important. A sustainability report should focus on ESG issues that are significant to the business and its stakeholders. For one company, this may include energy use, emissions and supply chain risk. For another, it may include workforce safety, data governance or responsible sourcing.
Listed companies are also expected to disclose governance structures, environmental performance, social responsibility and economic contributions where relevant. When these disclosures are clear and specific, investors gain a more meaningful view of how ESG risks and opportunities are managed.
Preparing for ESG Disclosure
Effective ESG disclosure begins before the report is written. Companies need to identify key stakeholders, understand their information needs and gather data from across departments.
This may involve engaging investors, employees, customers, regulators, suppliers and community stakeholders through surveys, interviews, internal workshops or focused discussions. These insights help companies decide which sustainability matters are most relevant.
Data management is equally important. ESG information often spans multiple functions, including operations, human resources, procurement, facilities, finance, and compliance. Without clear systems, companies may struggle with incomplete data, inconsistent definitions or weak audit trails.
Digital tools can help streamline data collection, aggregation and reporting. However, technology alone is not enough. Companies also need defined responsibilities, review procedures and proper documentation to support reliable disclosure.
Structuring the Sustainability Report
A well-structured sustainability report should help investors find and understand key information quickly. It may include an executive summary, sustainability strategy, governance overview, materiality assessment, stakeholder engagement outcomes, performance indicators and climate-related disclosures.
Clear language matters. Investors should not have to sift through vague statements to understand what the company has done, what it plans to do, and how performance is measured.
Charts, tables and year-on-year data can also improve readability. Where possible, companies should connect ESG performance to business strategy, risk management and operational priorities. This makes the report more useful than a standalone compliance document.
What are the Challenges in Sustainability Reporting?
Many companies face challenges when preparing sustainability reports. Common issues include incomplete data, limited internal ESG knowledge, difficulty engaging stakeholders and uncertainty over how to align sustainability matters with business strategy.
Another challenge is consistency. If data definitions change from year to year, investors may find it difficult to assess progress. Similarly, if ESG information is not reviewed with the same discipline as financial information, reporting credibility may be weakened.
Case Studies and Insights
Companies with stronger sustainability reports often share common practices. They use recognised reporting frameworks, explain material issues clearly, connect ESG matters to business strategy and provide measurable performance indicators.
They also tend to treat sustainability reporting as an ongoing process rather than a year-end exercise. Data is collected throughout the year, responsibilities are assigned early and reporting teams work with management to ensure disclosures are balanced and meaningful.
Another useful practice is verification. Even before assurance becomes mandatory, companies can review their reporting processes, test data quality and identify gaps. This helps improve the credibility of the final report and prepares the organisation for future sustainability report assurance requirements.
Future Trends in SGX Sustainability Reporting
Sustainability reporting is moving towards closer integration with financial reporting. Investors increasingly want to understand how ESG risks affect revenue, costs, capital expenditure, asset values, supply chain resilience and long-term competitiveness.
Technology is also changing the reporting process. Artificial intelligence, automation and data platforms may help companies collect, analyse and present ESG data more efficiently. However, these tools must be supported by governance, judgement and proper controls.
Additionally, social and governance factors are also likely to remain important. While climate disclosure is becoming more structured, investors continue to assess issues such as workforce practices, board oversight, ethics, diversity, cybersecurity and stakeholder management.
Understanding the Role of Professional Accountants
SGX sustainability reporting provides investors with a more transparent view of how companies manage ESG performance, climate risks, and long-term business resilience. For listed companies, the quality of disclosure can influence how investors assess governance, strategy, risk management and future readiness.
As sustainability reporting becomes more closely linked to financial performance, companies may also benefit from integrated support spanning assurance, financial accounting advisory, and accounting services. Credo Assurance supports organisations seeking to improve the quality, reliability and usefulness of their ESG reporting.
Through audit and advisory experience, our team helps companies review reporting processes, strengthen documentation, assess data quality and prepare disclosures that align with investor expectations and regulatory requirements.
Contact us to ensure a smooth reporting process.
