All listed businesses in Singapore must provide climate reporting in a 'comply or explain' way from 1 January 2022.

According to Singapore Exchange, climate reporting will be made mandatory for listed businesses in the financial, energy, agriculture, food and forest products sectors from 2023.

Reporting will be made mandatory for businesses in the materials and buildings and transportation sectors from 2024.

In a briefing note, Lisa Hui of Pinsent Masons MPillay, the Singapore joint law venture between MPillay and Pinsent Masons, said: "Lenders, insurers, regulars and investors are demanding high-quality information on how companies are managing the effects of climate change and the impact on a company's long-term prospects.

"These expectations are only set to increase for all companies. Mandatory climate reporting will encourage companies to evaluate how they allocate assets, extend financing and price risks going forward."

Businesses must conduct an internal review of their sustainability reporting processes and all directors must undergo a ‘one-time training' on sustainability. Sustainability reports need to be issued alongside annual reports unless issuers have undertaken external assurance.

Businesses are requested to set a board diversity policy which tackles issues such as gender, skill and experience. They are also requested to describe their board diversity policy and its details including targets, plans, timelines and progress in their annual reports.

SGX said that its separate public consultation on 27 proposed core environmental, social and governance (ESG) metrics and a portal for issuers to input ESG data also received ‘strong market support'. The metrics are not mandatory, and SGX said that companies can disclose in their sustainability reports ‘as a starting point'.

On climate reporting, according to a consultation paper launched in August 2021 by Singapore Exchange Regulation (SGX RegCo), businesses caught by the new rules should make disclosures in line with the recommendations of the global Task Force on Climate-related Financial Disclosures (TCFD).

The TCFD revised its reporting guidelines in November 2021. Companies should now disclose their carbon emissions independently of a "materiality assessment", which refers to the process of identifying, refining and assessing the potential ESG issues which could affect a business and its stakeholders.