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Consultation on climate-related financial disclosure in Singapore

Letter to the Sustainability Reporting Advisory Committee, 28 September 2023.

We refer to the Sustainability Reporting Advisory Committee’s consultation paper on climate-related financial disclosure, open for consultation until 30 September 2023. We welcome the opportunity to contribute our perspective on the Singapore climate reporting regime.

Norges Bank Investment Management (NBIM) is the investment management division of the Norwegian Central Bank and is responsible for investing the Norwegian Government Pension Fund Global. NBIM is a globally diversified investment manager with 1700 billion SGD at year end 2022, 5,8 of which invested in the shares of Singaporean companies.

The long-term return of the fund depends on sustainable economic, environmental and social development, as well as well-functioning and efficient markets. Climate risk has long-term and systematic characteristics, and our investments are exposed to both physical and transition risks. We support global principles and standards that underpin an orderly climate transition, and have promoted the development of strong reporting frameworks for corporate climate risk disclosure for over a decade. Limited access to high-quality data on the climate risk faced by companies hampers our ability to take better investment decisions, undertake more purposeful company engagement and develop tailored voting decisions.

Firstly, we welcome the establishment of the Sustainability Reporting Advisory Committee and its work towards the implementation of sustainability reporting standards in Singapore, and the cross-authority coordination between the Ministry of Finance, the Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange (SGX). As a global investor with holdings in 70 different countries, we have a clear interest in sustainability information being reported in a consistent and comparable manner across markets, and in disclosure regimes based on global standards. We therefore welcome Singapore’s move towards adoption of the ISSB standards, which provide a global baseline for disclosure of sustainability information.

We welcome the intention to align as closely as possible with the ISSB standards. Any deviation from the global baseline to address jurisdiction-specific concerns should ideally be temporary rather than permanent to preserve the value of global alignment. Jurisdiction-specific public policy goals can also be met through a “building blocks” approach by adding requirements to the global baseline. We therefore support SRAC’s recommendation of temporary reliefs, which ensures that Singapore corporates’ disclosures fully meet the standards at the end of the transition period.

We agree with the recommendation to mandate climate reporting both for listed issuers and for private companies, as this will provide a level playing field in terms of corporate disclosures. Furthermore, private companies are often in the value chain of listed companies and information from private companies is necessary for the latter to e.g. calculate their own Scope 3 emissions.

Regarding broader sustainability topics, we strongly support the recommendation to review the application of ISSB Standards for disclosure of sustainability-related risks and opportunities beyond CRD for all companies. We acknowledge the decision being taken by some jurisdictions to start the regulatory adoption of the ISSB Standards by mandating S2-aligned climate reporting, often building upon pre-existing TCFD-aligned requirements. However, information on the risks and opportunities linked to other sustainability topics is equally important for investors. Therefore, we encourage Singapore authorities to commit to a swift implementation of the General Requirements Standard IFRS S1 and to signal a clear timeframe towards this goal.

We support the recommendation to apply the existing reporting and filing timelines for financial statements to the CRD. This is beneficial to facilitate connectivity in reporting, usefulness of information and timely communication to users. We also support the recommendation to require external assurance of emissions information, and the intention to move towards reasonable assurance of the entire CRD report over time. A requirement to conduct assurance using a Singapore standard equivalent to ISSA 5000, once available, will be the best way to achieve alignment with global standards.

We thank you for considering our perspective and remain at your disposal should you wish to discuss these matters further.

Yours sincerely,

Carine Smith Ihenacho
Chief Governance and Compliance Officer

Elisa Cencig
Senior ESG Policy Adviser

Download the letter (pdf)