Sustainability reporting in Singapore has significantly evolved since the early 2000s, with increasing requirements for companies based in the city-state. In 2016, the Singapore Exchange (SGX) mandated that all listed companies publish an annual sustainability report. These reports complement traditional financial statements, showcasing how environmental, social, and governance (ESG) risks and opportunities are being managed.
Initially, mandatory ESG reporting targeted industries such as finance, agriculture, energy, food, and forest products. However, starting in 2024, this requirement extends to businesses in the materials, buildings, and transportation sectors.
Regional Context and Singapore’s ESG Leadership
Southeast Asia is one of the most climate-vulnerable regions, grappling with challenges like rising sea levels, droughts, and heatwaves. Despite these risks, ESG adoption in Southeast Asia lags behind global standards. Nevertheless, awareness and implementation of ESG practices are growing across the region, with Singapore positioning itself as a hub for companies committed to sustainability and ESG goals.
Understanding the Regulatory Landscape
Green Finance Action Plan
In 2019, the Monetary Authority of Singapore (MAS) launched the Green Finance Action Plan (GFAP), aiming to establish Singapore as a leading center for green finance. The GFAP seeks to bolster the financial sector’s resilience to environmental risks, develop sustainable financial solutions, leverage technology for sustainable finance, and build industry capabilities.
Singapore Sustainable Finance Association
Established in January 2024, the Singapore Sustainable Finance Association (SSFA) aims to enhance local talent and set industry standards to solidify Singapore’s role as a sustainable finance hub. The SSFA is expected to lead in areas such as transition finance and carbon credit trading, while also fostering collaboration among financial institutions to overcome barriers to financing sustainability projects.
International Sustainability Standards Board
Although adherence to the standards issued by the International Sustainability Standards Board (ISSB) is currently voluntary in Singapore, significant developments in 2024 may require listed companies and large private enterprises (with assets over S$1 billion or US$744 million) to adopt these standards in the coming years.
Environmental Risk Management
To strengthen the resilience of financial institutions, MAS introduced guidelines on environmental risk management in 2020. These guidelines apply to fund management companies and holders of capital market licenses in Singapore. Financial institutions are encouraged to integrate environmental considerations into their strategies and offerings, in line with recommendations from the Taskforce on Nature-related Financial Disclosures (TNFD), which saw over 320 organizations from 40 countries commit to nature-related disclosures in 2023. The Centre for Nature-based Climate Solutions at the National University of Singapore has been a TNFD knowledge partner since mid-2022.
MAS’ Greenprint: A New Platform for ESG Data
MAS has introduced a digital platform named Greenprint (pronounced “Gprnt”), designed to streamline ESG data collection and reporting for the financial sector. Greenprint facilitates seamless data exchange between the financial sector and the real economy, drawing on global and sector-specific data platforms.
Key Functionalities of Greenprint
Greenprint automates ESG reporting by integrating with digital systems businesses use for daily operations, such as bookkeeping and payment gateways. This integration allows businesses to consent to the release of data via APIs, enabling Greenprint to calculate sustainability metrics and generate ESG-related outputs for reports. The platform employs intelligent document processing to extract data from user-uploaded files, mapping sustainability metrics across global reporting standards and reducing corporate costs by minimizing duplicate reporting.
Greenprint’s features are particularly beneficial for small and medium enterprises (SMEs), offering reporting solutions and integration with key government bodies like the Accounting and Corporate Regulatory Authority (ACRA), Enterprise Singapore, and the Infocomm Media Development Authority (IMDA). This support is crucial for SMEs beginning their sustainability reporting journey.
SGX’s 27 Core ESG Metrics
The Singapore Exchange recommends 27 core ESG metrics for companies, categorized into Environmental, Social, and Governance groups:
Environmental Metrics
- Greenhouse Gas Emissions: Total CO2e emissions, including Scope 1, 2, and 3.
- Energy Consumption: Measured in megawatt-hours (MWh) or gigajoules (GJ).
- Energy Consumption Intensity: Energy consumed per unit of output or service.
- Water Consumption: Measured in megalitres (ML) or cubic meters (m³).
- Water Consumption Intensity: Water used per unit of output or service.
- Waste Generation: Total waste produced, in metric tons.
- Waste Generation Intensity: Waste generated per unit of output or service.
- Recycling Rate: Percentage of waste recycled.
Social Metrics
9. Employee Diversity: Percentage of employees from diverse backgrounds.
10. Employee Turnover Rate: Annual percentage of employee departures.
11. Training and Development: Average training hours per employee.
12. Health and Safety: Number of work-related injuries per employee.
13. Community Engagement: Percentage of employees involved in community service.
14. Customer Satisfaction: Customer feedback and satisfaction metrics.
15. Supply Chain Sustainability: Assessment of suppliers’ sustainability practices.
Governance Metrics
16. Board Composition: Percentage of independent directors and diversity metrics.
17. Management Diversity: Percentage of female senior management.
18. Anti-Corruption Policies: Incidents of corruption and preventive measures.
19. Certifications: Relevant sustainability certifications held by the company.
20. Assurance of Sustainability Reports: Whether the report is externally or internally assured.
21. Alignment with Frameworks: Alignment with recognized sustainability frameworks.
22. Stakeholder Engagement: Processes for engaging stakeholders on ESG issues.
23. Risk Management: Policies for managing ESG-related risks.
24. Ethical Behavior: Policies promoting ethical conduct.
25. Whistleblower Protection: Mechanisms for protecting whistleblowers.
26. Compliance with Regulations: Adherence to ESG-related laws and regulations.
27. Long-term Sustainability Goals: Commitment to long-term sustainability objectives.
These metrics help standardize ESG reporting, providing investors with comparable data to assess companies’ sustainability performance.
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