A July 2024 study, not a compliance scorecard
ACRA and the National University of Singapore examined the usefulness of climate disclosures and their connection to financial reporting. The study assesses 51 SGX Mainboard issuers, each with market capitalisation above S$1 billion on 4 July 2023 and expressly applying TCFD. Some 78% came from the five particularly climate-exposed sectors. Findings concern those sampled reports, not every Singapore company. Full, partial and no disclosure are research assessments of completeness and clarity. FY2022 reporting was comply-or-explain, so a less-than-full score is not itself a breach of listing rules. The assessment and selected examples involve judgement and industry context.
Why decision-useful reporting matters
The report links climate transparency to investors’ capital allocation and companies’ access to customers, markets and finance. It cites a Southeast Asian investment gap of $46 billion invested against $1.5 trillion required by 2030, alongside the region’s 55% share of global land-use-change/forestry emissions; those quoted dollar figures should not be relabelled as Singapore dollars. Comparable information helps lenders, insurers and investors judge transition readiness. The ISSB, established in November 2021, builds an investor-focused baseline on TCFD and other frameworks. Its standards were issued in June 2023; the report describes adoption as it stood in 2024.
The roadmap described in 2024
The publication’s historical roadmap proposed ISSB-aligned reporting for listed issuers from FY2025 and Scope 3 from FY2026, with limited assurance over Scope 1/2 from FY2027. Large non-listed companies were defined by BOTH annual revenue of at least S$1 billion and total assets of at least S$500 million, reporting from FY2027 unless exempt and obtaining limited assurance from FY2029. Their Scope 3 timing was to be confirmed. The diagram also discusses IFRS S1 preparation, synchronising circulation with financial statements, extension applications and registered ACRA audit firms or accredited testing/inspection/certification firms. Parent reporting under aligned/equivalent standards could support exemptions; other frameworks were described as a FY2027–FY2029 transitional route. These are the July 2024 roadmap’s statements, not a representation that later implementation rules remained unchanged.
Four pillars and better presentation
The eleven TCFD recommended disclosures sit under governance, strategy, risk management, and metrics/targets. IFRS S2 is closely aligned with those pillars while addressing governance processes, strategy, prioritisation/monitoring and performance against voluntary or legally required targets. The study recommends concise investor-oriented presentation, proportionate progress, connection to financial reporting and resilient business models. Reports often ran 51–100 pages, sometimes more than 150; 47% used a dedicated TCFD chapter and 37% an index. Proportionality concepts include reasonable/supportable information, avoiding undue cost or effort and matching methods to available skills, capabilities and resources.
Governance: responsibilities are clearer than decision processes
Full disclosure of assigned roles/committees reached 94% and organisational structure 90%. Board reporting processes were fully described by 75%, reporting frequency by 53%, and tracking progress by 76%. Only 33% fully described board consideration when setting performance objectives and 43% monitoring implementation/performance of sustainability initiatives. Just 12% disclosed anything about oversight of major capital expenditure, acquisitions and divestments; this is not the same as 12% full disclosure. Around 49% fully explained integration into strategy, planning, risk and budgets.
Management communication and the Singtel example
Only 12% fully explained how management is informed, while 45% explained monitoring/accountability. The study separately reports 82% explaining how information reaches boards and 76% explaining assessment/management. Singtel’s example delineates board and three board-committee involvement, the sustainability team and seven workstreams, specific responsibilities and meeting/reporting cadence. Its value is the visible communication and escalation chain, rather than merely listing committee names.
Strategy: risks, opportunities, geography and horizons
Some 88% fully disclosed both physical and transition risks, but opportunities were disclosed by only 61%. Materiality processes were fully described by 80%. Complete linkage to short-, medium- and long-term horizons reached 31%, 29% and 33% respectively; only 12% fully broke down risks/opportunities by sector or geography. CapitaLand Ascendas REIT illustrates locations affected by each risk, while ST Engineering links opportunities with time horizons and capabilities. Explain where exposure sits and when it matters, instead of presenting one undifferentiated list.
Business effects and financial planning
Some 57% fully described effects on business/products/services/operations and 57% adaptation/mitigation. Only 16% fully explained financial-planning integration; research/development reached 8%, capital expenditure/allocation 16%, capital access 14% and acquisition/divestment 16%. Only 6% disclosed even partial information on interdependencies affecting value creation. Singapore Airlines illustrates financial effects for each material risk, and Sembcorp describes expenditure, acquisitions, disposals and financing with actual/projected amounts. The study urges explanation of financial drivers over longer horizons, not solely near-term consequences.
Scenario analysis and resilience
Some 75% considered scenarios limiting warming to 2°C or below. However, full explanations of assumptions reached 29%, scenario-selection rationale 24% and strategic resilience 18%; potential financial-position/performance impact was disclosed by 20%. City Developments illustrates multiple time horizons, both 2°C and more severe warming cases, quantified financial effects and severity of individual risks. A scenario’s name is insufficient: describe assumptions, why the scenario is relevant, business responses and resulting resilience.
Risk identification, prioritisation and integration
Some 71% fully explained risk identification/assessment/management, but relative significance reached 24%, terminology/framework definitions 33% and assessing size/scope only 10%. Materiality determination reached 75%, prioritisation processes 33% and managing/transferring/accepting risks 29%. Integration with overall risk management was fully disclosed by 73%. Keppel illustrates identification/prioritisation steps; CapitaLand Investment explains mitigating, transferring, accepting or controlling risk; Singapore Land links prioritised risks, assessments and mitigation plans. These disclosures explain what action follows a risk assessment.
Operational metrics, remuneration and carbon pricing
Relevant non-GHG metrics were disclosed by 94%, quantitative metrics by 86% and multi-year data by 78%; only 59% explained the actions behind non-GHG trends. Full climate-linked executive remuneration disclosure reached 6%, opportunity metrics 8% and internal carbon pricing 4%; none disclosed external carbon pricing in the measured category. CapitaLand Investment illustrates remuneration linkage, and SATS opportunity-related metrics such as food-waste management. Metrics should show progress and underlying decisions, as well as opportunities for growth, rather than serving as a disconnected compliance list.
Emissions boundaries, categories and movement explanations
Scope 1 and 2 disclosure reached 96% and 100%, and Scope 3 59%. Only 27% fully explained reporting boundaries such as operational control, financial control or equity share. Scope 3 categorisation reached 41%, while both location-based and market-based Scope 2 reporting reached 24%. Multi-year emissions metrics reached 82%, but explanations of movements 61%. StarHub illustrates Scope 3 categories and both Scope 2 methods; Singapore Post explains acquisitions and reduction efforts behind changes. Scope 1 is direct owned/controlled-source emissions, Scope 2 purchased-energy emissions and Scope 3 other upstream/downstream value-chain emissions.
Targets need interim milestones and measured progress
Some 92% set GHG targets; 80% fully disclosed targets/timeframes and 36 companies, or 71% of the total sample, set net zero by 2050 or earlier. Ten committed to SBTi, of which seven set reduction targets consistent with below-1.5°C warming. Only 55% fully disclosed annual performance against targets, and 53% did not report interim milestones. CapitaLand Integrated Commercial Trust illustrates quantified, time-bound SBTi-aligned targets; Singapore Airlines adds non-GHG base years, target years and status; DBS presents interim/long-term targets and annual progress across nine sectors.
Connecting climate assumptions to financial statements
The study reviewed 60 CDP A-rated international companies: eleven rated A across climate, water and forests, plus 26 European and 23 Asian climate A-rated companies. Local Keppel DC REIT and OCBC examples put climate discussion in financial-statement notes, but largely within risk-management sections. Stronger linkage explains effects on useful lives, impairment, biological-asset fair values, provisions and contingent liabilities. Lenzing’s 2023 example considers each area: no new climate-law provision/contingency obligation arose that year, useful lives were not changed by assessed obligations, and timber-growth assumptions could change with climate conditions. Such assessments do not mean every entity must book an adjustment.
Shell’s historical sensitivity and dividend example
The reproduced Shell 2023 disclosure uses carbon costs tending towards $125 or $170 per tonne in 2050, with a Netherlands/Norway exception of about $220. Its IEA NZE2050 sensitivity shows recoverable amounts below carrying values by $2–4 billion for Integrated Gas, up to $1 billion for Upstream and $3–4 billion for Chemicals/Products, while noting potential partial price recovery for the latter. These are scenario sensitivities, not reported impairment amounts. The separate dividend discussion says hypothetical further impairments would not have affected 2023 dividend capacity/reserves; a $18–25 billion scenario-related reduction would partly realise a $234 billion merger reserve. It explicitly gives no prediction of future dividend capacity because of uncertainty. These are Shell’s historical, company-specific figures, not Singapore carbon-price forecasts or assurance of future dividends.
Using the study without overstating the evidence
The report cautions that even internationally it was difficult to find quantified climate effects on fair value or impairment. Absence of a quantified effect may mean immateriality or incomplete communication; it does not prove there is no risk. Use its examples to improve communication between sustainability, strategy, risk, budgeting and accounting teams. The NUS research team was led by Dr Sa-Pyung Sean Shin, with Professor Mak Yuen Teen as advisor and Gyuyong Choi, Geon Hyeong Kim and Sneha Bobba as research assistants. Its glossary distinguishes IFRS S1 general sustainability-related financial disclosures from IFRS S2 climate disclosures, and identifies SBTi, ISSB and SGX RegCo.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
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