S-REITs outshine global peers in climate-related disclosures

There are 40 S-REITs traded on the Singapore Exchange.

Singapore’s real estate investment trusts (S-REITs) take the lead globally when it comes to climate-related disclosures, an EY report revealed.

EY’s “Climate risk disclosures in real estate investment trusts (REITs)” report showed that S-REITs outperformed their global real estate peers in the coverage of their climate-related reporting in the four pillars: governance (S-REITs 100%, global 84%), strategy (S-REITs 87%, global 80%), risk management (S-REITs 92%, global 83%), and metrics and targets (S-REITs 86%, global 85%).

S-REITs also scored better than their global peers in the quality of their reporting in most of the pillars, namely,  governance (S-REITs 63%, global 43%), strategy (S-REITs 39%, global 38%), risk management (S-REITs 44%, global 36%).

S-REITs only lagged behind its global peers in terms of quality of their reporting in the metrics and targets pillar (S-REITs 37%, global 43%).

According to EY, 100% of S-REITs have made climate-related disclosures in their latest sustainability reports.

Of the 40 S-REITs listed on SGX, over half (55%) initiated their climate-related disclosures in the current year (FY 2022). The remaining 45% began their climate reporting before FY 2022 and have some level of maturity within their climate reporting.

Meanwhile, the study also found that  30% of S-REITs have disclosed their net-zero commitment.

“While S-REITs have done well in their coverage and quality of climate-related disclosures – scoring even better than their global sector peers in most aspects – there is certainly still room for improving the disclosure of metrics and targets used to assess and manage material climate-related risks and opportunities, especially those related to Scope 3 emissions across the value chain,” Nhan Quang, Partner, Climate Change and Sustainability Services at Ernst & Young LLP says:

“Integrating discussions on metrics and targets into the overall risk management and strategic planning processes such as investment and budget planning, and using technology to enable greater granularity in performance measurement can help,” Quang added.