Two thirds of SGX-listed firms begins climate reporting initiatives

But only a tenth have had such reports independently audited, EY said.

Over 240 out of 370 Singapore-listed firms, who published sustainability reports and with financial year-end, commenced their climate-related disclosures.

In a study conducted by EY and backed by CPA Australia, many in sectors required for climate reporting in FY 2023, such as agriculture, food, and forest products (77%); energy (88%); and financial (75%) industries began climate-related disclosures reporting in FY2022.

But one-third of the 370 firms that “issued their sustainability reports have yet to make climate-related disclosures, with over half (54%) looking to comply in the future and the remaining (46%) not mentioning any plans to comply."

For companies whose sustainability reports included climate-related disclosures, the study revealed that only 10% sought external assurance, with three firms integrating climate-related disclosures as part of their external assurance review process.

Of the listed firms with sustainability reports that included climate-related disclosures, nearly 80% were focused on climate-related risks to their business, and less than half (47%) have revealed climate-related opportunities. 

“This imbalance raises concerns given the multifaceted nature of climate change, which embodies both risks and opportunities. Companies should seek to identify key material climate-related risks as well as opportunities specific to their operations and their potential impact over the medium and long term,” EY advised.

The study also revealed that the 66% provided high-level observations on the potential impact of climate risks and opportunities, and few quantified and disclosed the range of financial impact. 

It also found that 68% of those companies with climate-related disclosures have not started scenario analysis on the impact of climate change on their operations. To address this, performing scenario analysis can help companies identify potential opportunities. It will let companies evaluate and make strategic decisions about how to expand or transform their business in ways that make positive outcomes to climate action.

Ken Ong, Partner, Assurance at Ernst & Young LLP, said the disclosure of climate-related information is a crucial step to improve transparency in Singapore’s business environment.

The study seeks to provide insights into the current state of climate reporting in Singapore after the SGX’s mandatory climate reporting began in financial year 2022 based on recommendations by the Task Force on Climate-related Financial Disclosures (TCFD). 

The study reviewed data from 370 Singapore-listed companies with financial year-end on 31 December 2022, and whose sustainability reports were published by 31 May 2023.