SGX RegCo Shares Key Elements for a Credible Climate Transition Plan

On 8 September 2023, the Singapore Exchange Regulation (“SGX RegCo“) issued the “Regulator’s Column: Developing and executing a credible climate transition plan“, highlighting three key elements of developing, executing and disclosing a credible climate transition plan, which companies should adopt. In June 2023, the inaugural IFRS Sustainability Disclosure Standards (“ISSB Standards“), that required information about a company’s climate transition plan as part of its strategy, were published. The ISSB Standards were endorsed by the International Organization of Securities Commissions (IOSCO) as an effective and proportionate global framework for investor-focused sustainability reporting. In July 2023, the Accounting and Corporate Regulatory Authority (ACRA) and SGX RegCo conducted a public consultation setting out the Sustainability Reporting Advisory Committee’s (SRAC) recommendations to, among other things, implement mandatory climate reporting requirements in a tiered and phased manner (“Consultation Paper“). The requirements would first apply to issuers of equity securities on SGX-ST (“SGX-ST equity issuers“) and then to large non-listed companies above a certain annual revenue threshold. It is proposed, among other things, that the ISSB Standards be used as baseline reporting standards. You may read more about the key recommendations/proposals in our July 2023 Client Update, available here.

SGX RegCo expects to consult on amendments to the SGX-ST Listing Rules to align sustainability reporting requirements with the ISSB Standards by the end of 2023. SGX RegCo aims to finalise its recommendations on mandatory climate reporting for SGX-ST equity issuers by 2024, taking into account the feedback received in response to the Consultation Paper. It is an involved process to create a transition plan, and having an early start will ease the transition to reporting against the ISSB Standards. To help you and your business with the process, this Update outlines the three key elements of developing, executing and disclosing a credible climate transition plan and action items as stated in the Regulator’s Column.