SGX Companies Face Sustainability Reporting Wake-Up Call: Two-Thirds Unprepared for New Standards
Singapore’s listed companies are staring down the barrel of a regulatory transformation. By the end of FY2025, all SGX issuers must adopt the International Sustainability Standards Board (ISSB) framework for climate-related disclosures. This replaces the previous “comply or explain” system based on the Task Force on Climate-related Financial Disclosures (TCFD) and introduces mandatory reporting of climate risk, strategy, and performance.
Yet despite the urgency, the latest EY study reveals that only 14% of companies have begun aligning their disclosures with the ISSB standards—and just one-third are fully prepared. For the remaining majority, this is a wake-up call.
Why the ISSB Mandate Is a Turning Point
The new ISSB climate disclosure rules, IFRS S1 and S2, mark a seismic shift in sustainability reporting. No longer voluntary, these standards mandate that SGX-listed companies disclose:
Governance over climate-related risks and opportunities
Strategic implications of climate change across time horizons
Scenario analysis showing resilience under different climate futures
Quantified metrics, including Scope 1, 2, and potentially Scope 3 emissions
Transition plans, financial impact assessments, and ESG-linked incentives
The move positions Singapore as a regional leader in sustainability governance - but also puts intense pressure on unprepared issuers.
Progress Report: What the Data Shows
The EY report analysed 351 SGX-listed companies' FY2024 disclosures, revealing some progress:
98% made at least one climate-related disclosure
32% met all 11 TCFD recommendations (up from 20% in FY2023)
84% described how climate risks affect strategy and planning
62% conducted climate scenario analysis (vs. 47% in FY2023)
Despite these gains, early ISSB adoption remains strikingly low. Only 14% of issuers incorporated ISSB-aligned standards into their 2024 reports, indicating a major compliance gap heading into 2025.
The Gaps That Need Urgent Attention
While most companies are disclosing some climate data, critical gaps remain that could impede full ISSB compliance:
Scenario Analysis Weakness: Just 62% conducted analysis, and few linked findings to transition strategy or financial outcomes
Lack of Transition Plans: Only 47% of companies disclosed actionable climate transition plans, despite many setting net-zero targets
Scope 3 Emissions Gaps: Although 92% disclosed Scope 1 & 2 emissions, only 45% covered Scope 3—and just 14% set reduction targets across all three scopes
Financial Impact Disclosures: A mere 1% quantified the financial impact of climate risks; 85% offered only qualitative statements
These figures reveal a disconnect between ambition and action-and signal potential red flags for regulators and investors.
Governance and Competency - Where Readiness Falters
Strong climate governance is essential to ISSB compliance. Yet many companies lack the structural foundation:
Only 55% disclosed how they determine board and management competency in climate oversight
ESG-linked executive remuneration remains low, with just 17% tying sustainability to performance metrics
Disclosures around cross-functional training and climate literacy are sparse, risking inconsistent application across business units
These shortfalls threaten not only compliance but also the effectiveness of sustainability strategies.
Three Priorities for ISSB Readiness in 2025
To meet the ISSB mandate, and build climate resilience, companies should urgently focus on:
1. Deepen Scenario-Based Risk Analysis
Align scenario modeling with strategic planning cycles and integrate findings into forward-looking business plans and transition pathways.
2. Develop and Disclose a Robust Transition Plan
An ISSB-compliant plan must be time-bound, action-driven, and clearly aligned with decarbonisation targets. As of FY2024, fewer than half of companies have met this bar.
3. Bridge Governance and Skill Gaps
Train directors and finance teams on climate risk, emissions reporting, and sustainability strategy. Transparency depends on cross-functional collaboration.
A Regulatory Wake-Up Call
Singapore’s ISSB mandate represents more than a reporting shift, it’s a strategic stress test. With just months until mandatory compliance, companies must act decisively. Those that move early will gain investor trust, attract capital, and future-proof their operations. Those that delay risk falling behind.
SGX Reporting: FAQs
What are the ISSB climate reporting requirements for SGX companies?
They must disclose climate-related risks, strategy impacts, emissions (Scopes 1–3), financial effects, and governance structures in line with IFRS S1 and S2 by FY2025.
When will climate reporting become mandatory in Singapore?
FY2025 is the first year where all SGX-listed companies must comply with ISSB-aligned disclosures.
How many SGX companies are ready for ISSB standards?
Only 14% of listed issuers adopted the ISSB framework early in FY2024, signaling widespread unpreparedness.
What’s the biggest gap in Singapore’s climate reporting practices?
Major gaps include scenario analysis, Scope 3 emissions disclosure, transition planning, and financial impact quantification.
How can companies prepare for ISSB-aligned reporting?
They should conduct scenario analysis, disclose transition plans, set measurable emissions targets, and align governance structures.