Starting FY 2025, Singapore is rolling out a bold new climate disclosure mandate aligned with global IFRS S2 standards—putting sustainability at the heart of business. For Indian exporters, this isn’t just a compliance hurdle; it’s a gateway to future-ready trade. With US$ 12 bn in exports to Singapore last year, adapting to these new rules isn’t optional—it’s essential. Here’s what it means and how to stay ahead.
Singapore has taken significant steps to enhance its sustainability reporting regime by mandating climate-related disclosures that are aligned with international standards, starting from the financial year 2025. This step will have far-reaching implications for businesses operating in Singapore, including Indian exporters who supply to the Singaporean market. The new requirements represent an important development in Singapore’s sustainability and reflect the global trend toward standardised climate reporting frameworks.
Singapore’s New Climate Reporting Framework
Singapore Exchange Regulation (SGX RegCo) announced on September 23, 2024, that it will begin incorporating the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards into its sustainability reporting regime. From Financial Year 2025, SGX RegCo will require all issuers to report on Scope 1 and Scope 2 greenhouse gas (GHG) emissions. These climate-related disclosures must incorporate the climate-related requirements specified in the IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board (ISSB). This is a step taken upon Singapore’s previous requirements based on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations that SGX RegCo had mandated in a phased approach since FY 2022.
Specific Reporting Requirements Under IFRS S2
The new mandate requires companies to follow the IFRS S2 standard, which focuses specifically on climate-related disclosures. Under this framework, companies must provide comprehensive information about:
Greenhouse gas emissions
Companies must report their Scope 1 GHG emissions (direct emissions from owned or controlled sources) and Scope 2 GHG emissions (indirect emissions from purchased electricity, steam, heating, and cooling).
Additional sustainability reporting components:
From FY 2026, companies will need to disclose additional primary components in their sustainability reports, including:
● Material Environmental, Social, and Governance (ESG) factors
● Policies, practices, and performance
● Targets
● Sustainability reporting framework
● Board statement and associated governance structure for sustainability practices
Implications for Indian Exporters to Singapore
India exported goods worth US$ 12.04 billion to Singapore in 2023. With Singapore’s climate disclosure mandate aligning with global trends, Indian exporters must comply to retain market access.
Compliance challenges:
● Data collection: Need for accurate GHG emissions tracking systems.
● Lack of expertise: Limited familiarity with IFRS S2 and climate reporting.
● Supply chain complexity: Difficulties in end-to-end emissions tracking.
● Resource constraints: Financial and manpower limitations, especially for smaller firms.
Preparing for Compliance: Strategic Approach for Indian Exporters
● Assess carbon footprint: Begin by evaluating Scope 1 and 2 emissions to establish a baseline for improvements.
● Build reporting capabilities: Train staff, implement data systems, and consult sustainability experts to strengthen ESG reporting.
● Leverage technology: Use AI and ML-powered tools from fintech and climate-tech firms for efficient ESG data management.
● Engage Singaporean partners: Collaborate with Singaporean customers to understand compliance expectations and share resources.
● Align with India’s ESG standards: Utilise India’s aligned ESG disclosure norms as a strong base for meeting global requirements.
How Automation Companies and AI Can Help
Automation and AI companies empower Indian exporters to confidently navigate Singapore’s IFRS S2-aligned climate disclosure regime through a comprehensive suite of AI-powered tools. Their products can help automate compliance documentation and validate ESG data
integrity, while more products offer an interactive AI assistant to help interpret regulatory expectations in real-time. The digital platform is also at times enabled with a blockchain-secured emissions tracker that supports verifiable Scope 1 and 2 reporting, and its ERP/SAP-compatible integrations streamline sustainability data collection across supply chains. By aligning Indian exporters with global ESG norms, such companies reduce compliance friction, accelerate market access, and ensure long-term competitiveness in Singapore and beyond.
Blog Authored by ~ Liquidmind®.ai
Sources:
https://www.allenandgledhill.com/sg/publication/articles/29209/ifrs-sustainability-disclosure-standards-to-be-incorporated-into-sgx-climate-reporting-rules-from-fy-2025
https://www.wri.org/update/singapore-net-zero-corporate-climate-risk-disclosure-private-climate-finance
https://www.sgxgroup.com/media-centre/20240923-sgx-regco-start-incorporating-ifrs-sustainability-disclosure
