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Mainboard Rules
Practice Notes
Future version: Effective from 01 Jan 2026

Cross-referenced from Rules 711A and 711B

  1. Introduction
    1. Listing Rule 711A requires every issuer to prepare an annual sustainability report, which must describe the issuer's sustainability practices with reference to the primary components set out in Listing Rule 711B. This Practice Note contains the Sustainability Reporting Guide (the "Guide"), which provides guidance on the expected structure and contents and the preparation of the sustainability report.
    2. Sustainability reporting disclosure does not detract from the issuer's obligation to disclose any information that is necessary to avoid the establishment of a false market in the issuer's securities or would be likely to materially affect the price or value of its securities pursuant to Listing Rule 703.
    3. A glossary of the common terms used in the Guide is set out in paragraph 8 of this Guide.
  2. Policy Statement on Sustainability Reporting
    1. Issuers make regular financial reports to their investors that are used for assessment of the likelihood of repayment and the returns on investment.
    2. The addition of sustainability reporting to financial reporting provides a more comprehensive picture of the issuer: statements of financial position and comprehensive income provide a snapshot of the present and an account of the past year, while sustainability reports of environmental, social and governance (“ESG”) factors show the risks and opportunities within sight, managed for future returns. Taken together, the combined financial and sustainability reports enable a better assessment of the issuer's financial prospects, the sustainability of the current business into the future and quality of management.
    3. To achieve the additional transparency which encourages efficiency and innovation, SGX-ST requires each issuer to publish an annual sustainability report. This Guide provides guidance to the issuer on compliance with the requirements under the Listing Rules.
  3. Principles

    Board responsibility

    1. The Code states as its preamble that sustainability, together with accountability and transparency, is a tenet of good governance. It provides that the Board is collectively responsible for the long-term success of the issuer, and the Board's role includes setting strategic objectives which should include appropriate focus on sustainability. The Board has ultimate responsibility for the issuer's sustainability reporting. Consistent with its role, the Board should determine the ESG factors identified as material to the business and see to it that they are monitored and managed. Management has responsibility to ensure that the ESG factors are monitored on an ongoing basis and properly managed. The Board's close interaction with management will enable the Board to satisfy itself on the way sustainability governance is structured and functioning through the various levels of management. If any question is raised regarding the issuer's sustainability reporting, the Board and management should make sure it is addressed.

    2.  [Deleted]

      Report risks as well as opportunities

    3. In identifying material ESG factors, the issuer should consider both risks and opportunities. In addition, it is conceptually sound, and validated by experience, that risks well-managed represent strengths which can be applied to fulfill opportunities. The risks and opportunities within sight have direct bearing on strategies and operations and should be reported for clearer understanding of the issuer's performance, prospects and management quality. To facilitate understanding, issuers should give the whole explanation in a concise manner.

      Balanced reporting

    4. In reporting on sustainability, care should be taken to give a neutral and accurate view. There may be a tendency to give more prominence to what is favourable and understate what is negative. Both situations require comprehensive explanations. In reporting performance, factors beyond the issuer's control are as relevant to exceeding the target as to a performance shortfall. In the event of underperformance, the issuer's response is also important and should be included to bring about confidence in its longer term sustainability objectives.

      Stakeholder engagement

    5. The issuer's responsibility on disclosure, including annual reports and sustainability reports, is first and foremost to current and potential shareholders, i.e. the investing public. Interaction of the issuer with its other stakeholders is also of interest to investors for its relevance to sustainability across the value chain of the issuer. The views of stakeholders also contribute to inform the issuer's identification of material ESG factors. On a continuing basis, regular and sustained engagement with stakeholders provides the issuer with an up-to-date picture of its sustainability within both its business and physical environments. The material outcomes of such engagement should be included in the sustainability report.
  4. Contents of Sustainability Reporting

    Primary components

    1. The sustainability report should comprise the following primary components:

      1. Material ESG factors. The sustainability report should identify the material ESG factors, and describe both the reasons for and the process of selection, taking into consideration their relevance or impact to the business, strategy, financial planning, business model and key stakeholders.
      2. Climate-related disclosures. The sustainability report should contain disclosures related to climate-related risks and opportunities.
      3. Policies, practices and performance. The sustainability report should set out the issuer's policies, practices and performance in relation to the material ESG factors identified, providing descriptive and quantitative information on each of the identified material ESG factors for the reporting period. Performance should be described in the context of previously disclosed targets.
      4. Targets. The sustainability report should set out the issuer's targets for the forthcoming year in relation to each material ESG factor identified. Targets should be considered for defined short, medium and long term horizons, and if not consistent with those used for strategic planning and financial reporting, the reasons for the inconsistency should be disclosed.
      5. Sustainability reporting framework. The issuer should select a sustainability reporting framework (or frameworks) to guide its reporting and disclosure. For climate-related disclosures, the issuer should refer to paragraphs 4.7 to 4.28 of this Guide. The sustainability reporting framework(s) selected should be appropriate for and suited to its industry and business model. The issuer should state the name of the framework(s), explain its reasons for choosing the framework(s) and provide a general description of the extent of the issuer's application of the framework(s). Where the issuer is applying a portion of a particular framework, the issuer should provide a general description of the extent of the issuer's application of the framework.
      6. Board statement. The sustainability report should contain a statement of the Board that it has considered sustainability issues in the issuer’s business and strategy, determined the material ESG factors and overseen the management and monitoring of the material ESG factors. In addition, the sustainability report should describe the roles of the Board and the management in the governance of sustainability issues.

      Identification of material ESG factors

    2. The issuer should review its business in the context of the value chain and determine what ESG factors in relation to its interaction with its physical environment and social community and its governance, are material for the continuity of its business. The issuer is expected to report the criteria and process by which it has made its selection with reference to how these factors contribute to the creation of value for the issuer.
    3. In broad terms, environmental factors would include materials, energy, biodiversity, water, greenhouse gas (“GHG”) emissions, effluents and waste as well as environmental complaint mechanisms. Social factors would include health and safety, employment practices and labour rights such as collective bargaining, product responsibility, anti-corruption, supplier assessments and impact of direct and supply chain activities on local communities. The framework chosen is likely to have additional factors that the issuer would report on.
    4. Corruption is a factor on which many investors require reassurance, whether inducement is being offered to employees or by employees to others. Where corruption has been addressed in the Corporate Governance report, the issuer may refer to that report. If corruption is not assessed to be a material ESG factor by the issuer, where stakeholders express sufficient interest in the information, the issuer is advised to state its policy and safeguards on its website.
    5. Gender, skills and experience have been highlighted as diversity indicators material to business sustainability. Diversity greatly enhances the issuer's capacity for breadth of input and perspectives into decision making, risk alertness and responsiveness to change. The issuer should be aware of this trend and assess whether diversity is a material social factor in its business. It should engage stakeholders in assessing the necessity of reporting on this matter. In satisfying investors and other stakeholders, diversity should be examined through broad levels of staff and also importantly, in the Board. Where other sections of the annual report sufficiently address stakeholders’ interest in diversity, the issuer may refer to those sections.

    6. The issuer should consider not just its internal circle of operations but also widen that circle to include persons and processes in the value chain that contribute to the issuer's product or service. Parts of the business outsourced to third parties (for example, freight and logistics), as well as downstream processes (for example, product defect response), constitute an integral part of the issuer's business and need to be included in the sustainability report.

      Climate-related disclosures

    7. Climate change threatens to disrupt businesses in a precipitous and potentially devastating manner, with consequential detrimental effects on their stakeholders and providers of capital. Conversely, it also opens up new markets for solutions that respond to the threat. Investors need to properly understand the climate-related risks and opportunities of their portfolio in order to price or value their investments.
    8. Securities markets promote the ready availability of decision-useful information so that it may be reflected in the price discovery process. In doing so, exchanges facilitate the allocation of capital to its most efficient use and the transfer of risks to those most willing to bear them.
    9. The IFRS Sustainability Disclosure Standards build on the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”). It aims to be a comprehensive global framework of sustainability-related financial disclosures to meet the needs of capital markets and to serve the demand for more consistent, comparable and verifiable information about the exposure to, and management of, sustainability-related risks and opportunities. The IFRS Sustainability Disclosure Standards were developed to support a global framework of investor-focused disclosures on sustainability-related financial information and have received widespread support globally, including from the G20 and the Financial Stability Board. The International Organization of Securities Commissions has also endorsed the IFRS Sustainability Disclosure Standards in July 2023. 

      Structure of the IFRS Sustainability Disclosure Standards and baseline requirement

    10. The core content of the IFRS Sustainability Disclosure Standards is structured in alignment with the four pillars of the TCFD recommendations: governance, strategy, risk management, and metrics and targets. Climate-related risks are associated with both physical risks (such as those arising from weather-related events like storms, floods or heatwaves and longer-term shifts in climatic patterns like sea level rise) and transition risks (arising from efforts to transition to a lower-carbon economy and may include policy, technological and reputational risks).
    11. IFRS S1 sets out the general requirements for disclosure of sustainability-related financial information including the conceptual foundations, core content, general requirements and judgements, uncertainties and errors. IFRS S2 sets out supplementary requirements that relate specifically to climate-related risks and opportunities. 
    12. The baseline requirement for issuers under the Listing Rules in respect of the disclosure of the primary component in Listing Rule 711B(1)(aa) is to disclose information on climate-related risks and opportunities that apply all the requirements in IFRS S2 (other than the disclosure of Scope 3 GHG emissions as set out in paragraph 4.23 of this Guide), and consequently apply the climate-relevant provisions in IFRS S1.
    13. Therefore, in applying IFRS S1 for climate-related disclosures, an issuer should particularly refer to the conceptual foundations, general requirements, judgements and uncertainties and errors specified therein. Key concepts such as connected information, value chains, assessment of materiality and key requirements such as the reporting entity and timing and location of reporting are set out in IFRS S1. For example, materiality of information is judged in relation to whether omitting, misstating or obscuring the information could reasonably be expected to influence decisions of primary users of general purpose financial reports. 
    14. IFRS S1 requires entities that report their sustainability-related financial disclosures in accordance with the IFRS Sustainability Disclosure Standards to make an explicit and unreserved statement of compliance, which may not be made unless an entity complies with all the requirements, including the requirements in IFRS S1 applicable beyond climate-related disclosures. In this regard, issuers will not be required to make such a statement of compliance. SGX RegCo permits and encourages issuers of any size to use and fully apply the IFRS Sustainability Disclosure Standards. An issuer that complies with all the requirements in IFRS S1 and IFRS S2 can, but is not mandated to, make an explicit and unreserved statement of compliance with the IFRS Sustainability Disclosure Standards; an issuer that complies with all the requirements in IFRS S2 and the climate-relevant provisions in IFRS S1 can, but is not mandated to, state that it complies with the climate-related requirements in the IFRS Sustainability Disclosure Standards. 
    15. In the core content of IFRS S1, there are also specific paragraphs which will be relevant for the issuer including the elaboration of short-, medium- and long-term time horizons, trade-offs between sustainability-related risks and opportunities that an issuer considered and the objective of sustainability-related financial disclosures on risk management to enable users of general purpose financial report to assess an issuer’s overall risk profile and its overall risk management process. 

      ISSB guidance

    16. The ISSB has issued application guidance, which forms an integral part of the IFRS Sustainability Disclosure Standards, on, among others, the following topics:
      1. identifying sustainability-related risks and opportunities and disclosing material information about such risks and opportunities;
      2. applying scenario analysis to assess climate resilience;
      3. measuring GHG emissions, including Scope 3 GHG emissions;
      4. disclosing information relevant to the cross-industry metric categories; and
      5. disclosing information about the climate-related targets that have been set or are required to be met by law or regulation.
    17. In addition, the ISSB has also issued accompanying guidance containing illustrative guidance and illustrative examples to support companies in applying the IFRS Sustainability Disclosure Standards on, among others, the following topics:
      1. guidance on metrics that could be disclosed as part of information relevant to the cross-industry metric categories;
      2. examples of disclosing GHG emissions applying the principles in IFRS S1 for aggregation and disaggregation; and
      3. industry-based guidance on identifying appropriate disclosures about climate-related risks and opportunities that are associated with common business models and activities in a particular industry.

      Reliefs

    18. The ISSB has sought to achieve a balance between the costs for companies in applying the requirements and ensuring investors are provided with consistent, comparable and verifiable information. It introduced a package of (permanent) structural reliefs and (temporary) transition reliefs in the IFRS Sustainability Disclosure Standards. 
    19. As part of the (permanent) structural reliefs, an issuer is allowed to:
      1. consider its skills, capabilities and resources when determining its approach:
        1. for its climate-related scenario analysis; and
        2. in preparing disclosures about the anticipated financial effects of a climate-related risk or opportunity; and
      2. use all reasonable and supportable information that is available to the issuer at the reporting date without undue cost or effort in:
        1. identifying climate-related risks and opportunities; 
        2. preparing disclosures about the anticipated financial effects of a climate-related risk or opportunity;
        3. determining its approach, and selecting the inputs, for its climate-related scenario analysis; 
        4. determining the scope of the value chain;
        5. calculation of amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities; and
        6. measuring Scope 3 GHG emissions.
    20. As part of the (temporary) transition reliefs, an issuer (including newly-listed issuers) need not do the following in the first year of reporting applying the IFRS Sustainability Disclosure Standards:
      1. provide its Scope 3 GHG emissions;
      2. use the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standards (2004) if it was previously using a different method; and
      3. provide comparative information in respect of the preceding period.

      Scope 3 GHG emissions

    21.  IFRS S2 requires disclosure of Scope 3 GHG emissions, and the approach used to measure such GHG emissions. Emissions must be measured in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standards (2004), subject to the reliefs specified and to the extent that it does not conflict with the IFRS Sustainability Disclosure Standards. An issuer should consider the 15 categories of Scope 3 GHG emissions, as described in the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011) (“Scope 3 Standard”), to identify which categories are applicable to the issuer. The issuer might determine that not all categories are applicable to it and therefore disclose which of these categories are included in its Scope 3 GHG emissions. For example, an issuer may not have leased assets or franchises or may be unable to estimate Scope 3 GHG emissions due to a lack of data or other limiting factors, as described in the Scope 3 Standard. 
    22. The ISSB has also developed a Scope 3 measurement framework to provide additional guidance about measuring Scope 3 GHG emissions. While direct measurement and primary data is preferred, an issuer may still estimate Scope 3 GHG emissions based on assumptions and appropriate inputs and use secondary data under such framework. Primary data includes data provided by suppliers or other entities in the value chain from specific activities within an entity’s value chain, while secondary data is not directly obtained. Secondary data is typically supplied by third-party providers and includes industry-average data. 
    23. Recognising that the measurement and reporting methodologies of Scope 3 GHG emissions are still evolving, SGX RegCo will carry out an in-depth review of issuers' experience and readiness in reporting Scope 3 GHG emissions before setting out the implementation roadmap for disclosures of Scope 3 GHG emissions. In the implementation roadmap, larger issuers (e.g. issuers above a certain market capitalisation) will likely be prioritised for reporting. The intention is for larger issuers by market capitalisation to report Scope 3 GHG emissions from the financial year commencing on or after 1 January 2026. Ample notice will be given to issuers before reporting requirements come into effect. Issuers that are already reporting their Scope 3 GHG emissions are encouraged to continue to do so. Issuers that have not yet reported on Scope 3 GHG emissions are encouraged to build up their capabilities in the interim period.

      Scenario analysis

    24.  IFRS S2 requires use of climate-related scenario analysis to inform an issuer’s disclosures about their resilience to climate change. IFRS S2 contains application guidance on how an issuer is required to determine the method of scenario analysis to assess its climate resilience. To reduce the risks and impacts of climate change, almost all countries have agreed to take action in limiting global warming to well below 2°C above pre-industrial levels, while pursuing efforts to arrest the increase to 1.5°C above pre-industrial levels. The issuer should describe how resilient its strategies are to climate-related risks and opportunities, taking into consideration a transition to a lower-carbon economy consistent with a 2°C or lower scenario and, where relevant, scenarios consistent with increased physical climate-related risks.
    25. An issuer new to scenario analysis can consider starting with qualitative scenario narratives to explore the potential range of implications. As it gains more experience, it can consider using quantitative information to describe the potential outcomes, and to enhance the rigour of that analysis.
    26. The Sustainable Stock Exchanges initiative has also developed a checklist in its model guidance on climate disclosure (“SSE Model Guidance on Climate Disclosure”). The SSE Model Guidance on Climate Disclosure sets out a simplified three stage process to the conduct of scenario analysis. First, the issuer should identify appropriate scenarios that align with its underlying assumptions and the key risks and opportunities of its sector or industry, and clearly explain the scenarios used. Second, the issuer may set boundaries of its scenario analysis with sufficient disclosure of the reasons for exclusion and inclusion. A smaller issuer may feel that an analysis of the direct operations sufficiently covers the climate-related risks and opportunities within each scenario, while a larger issuer and those in the financial sector should expand their analysis beyond their direct operations to include indirect GHG emissions (i.e. Scope 3 GHG emissions). Third, an issuer should evaluate its physical and transitional risks within the scenarios chosen. Mapping the severity and likelihood of the risks enables the issuer to develop a strategic plan for future scenarios. Additional guidance on scenario analysis as required by IFRS S2 has also been provided in the model guidance on sustainability-related financial disclosures issued by the Sustainable Stock Exchanges initiative in 2024.

      Industry-based metrics and cross-industry metrics

    27. IFRS S2 requires an issuer to disclose industry-based metrics that are associated with common business models and activities in a particular industry. When an issuer provides industry-based metrics, it shall refer to and consider the relevant industry-based guidance to present fairly the climate-related risks and opportunities to which it is exposed.
    28. In addition, IFRS S2 requires an issuer to disclose cross-industry metric categories including:
      1. climate-related transition risks – the amount and percentage of assets or business activities vulnerable to transition risks;
      2. climate-related physical risks – the amount and percentage of assets or business activities vulnerable to physical risks;
      3. capital deployment – the amount of capital expenditure, financing or investment deployed towards climate-related risks and opportunities; and
      4. internal carbon prices used to assess the cost of emissions.

      The industry-based guidance can assist issuers in meeting the requirements for disclosures related to cross-industry metric categories.

      Materiality

    29. As guidance, sustainability reporting relates to the most important ESG risks and opportunities that will act as barriers or enablers to achieving business goals in the short, medium and long term. The omission or misstatement of these risks or opportunities could influence the decisions of investors. The sustainability reporting framework selected by the issuer may also contain a definition of materiality that the issuer should consider. For example, for climate-related disclosures, in accordance with the IFRS Sustainability Disclosure Standards, materiality of information is judged in relation to whether omitting, misstating or obscuring the information could reasonably be expected to influence decisions of primary users of general purpose financial reports. This would require consideration of the characteristics of those users and of the issuer’s own circumstances.
    30. Generally, what is material in sustainability reporting would also be considered material in financial terms, if not in the immediate period, then over time.
    31. In assessing materiality of the ESG factors on which it reports, the issuer should first satisfy itself of the relevance of selected factors to its business strategy and outcomes. This has the benefit of focusing both executives and employees on uniform key risks and opportunities that deliver (or impede) desired outcomes.
    32. The issuer should use risk ranking and prioritisation to distil the material ESG factors. This process is similar to the widely-practised Enterprise Risk Management (“ERM”) process. The issuer should expand the breadth of the assessment to integrate ESG risk management structures into existing ERM structures or apply existing ERM structures to ESG risk management structures. Issuers may consider sustainability-related opportunities as part of business strategy. 
    33. The Board should determine the material ESG factors and the issuer's response to the attendant risks and opportunities. Discussion with stakeholders contributes to an accurate appreciation of what is important in the business on an ongoing basis.

      Possible process and tools

    34. A possible process for assessing ESG factors with material relevance to the business and business model are set out in the following paragraphs.
    35. In assessing materiality of the ESG factors on which it reports, the issuer may consider:
      1. Value drivers
      2. Stakeholder engagement
      3. Risk management
      4. External factors, for example sector, geography, economics, market, social, environment
      5. Internal factors, for example business model, business cycle, strategy
      6. Qualitative perspectives, for example operational, strategic, reputational and regulatory
      7. Timeframe of these considerations
    36. The issuer may use the following Materiality Determination Process: Identify — Rate — Prioritise — Validate. The issuer should disclose the outcomes of this process in its sustainability report.
      1. STEP 1: IDENTIFY. The issuer should identify the most pressing (material) factors (impact/opportunities) for the issuer (or for each subsidiary in the group). It will also help formulate management's approach and response, and identify where data collection needs to be strengthened.
      2. STEP 2: RATE. Once the issues of the issuer and its subsidiaries have been explored, the issuer will need to cluster similar issues e.g. safety and health issues can be clustered together. If the issuer is a holding company, a rating process can be done to assess what issues are pervasive/most common across the group.
      3. STEP 3: PRIORITISE. Once the issues of the issuer and its subsidiaries have been clustered and rated, the issuer will need to prioritise them using a matrix based on likelihood and impact.
      4. STEP 4: VALIDATE. Once the issuer has prioritised its factors, they need to be internally validated and signed off by the Board.

      Policies, practices and performance

    37. The issuer should devise policies and processes to adequately and effectively manage the risks associated with the identified material ESG factors, and describe key features of mitigation.
    38. A description of the ESG practices and performance across historical and the current reporting periods allows investors and the issuer itself to track its progress. These metrics also form the baseline from which the issuer chooses to set its targets, as informed by its strategic plan and financial reporting.
    39. An effective policy and operational response to sustainability risks and opportunities requires performance measurement and its linkage to performance incentives. Having a good performance measurement system allows the issuer to benchmark performance against stated objectives and facilitates comparison over time and across entities. Clearly linking sustainability risks and opportunities with strategy, other organisational risks, operational indicators, performance measures and performance incentives not only enhances understanding but provides an engine for improvement, innovation and accountability.
    40. A clear description of the issuer’s substantive response to ESG risks and opportunities, with a focus on its policies, practices and performance against targets, will bolster investors’ confidence in the Board and management.

      Sustainability reporting framework

    41. The issuer should select a sustainability reporting framework which is appropriate for and suited to its industry and business model, and explain its choice. In doing so, the issuer should place importance on using a globally-recognised framework for its wider acceptance in an increasingly global marketplace. The issuer can be more easily understood and compared with its peers in Singapore as well as in other jurisdictions across the world. The issuer should exercise considerable caution if it chooses to deviate from generally-accepted frameworks. Where the issuer is applying a portion of a particular framework, the issuer should provide a general description of the extent of the issuer's application of the framework.
    42. Among the well-known and globally-recognised sustainability reporting frameworks, the IFRS Sustainability Disclosure Standards and the Global Reporting Initiative (“GRI”) Standards set out generic sustainability factors and general principles and indicators that an issuer can use to report sustainability policies, practices, performance and targets. The SASB Standards also enables issuers to adopt an industry-specific approach to material ESG factors. The Integrated Reporting Framework (“<IR>”) also sets out a general framework for reporting. An issuer using <IR> should consider ESG factors when determining their material factors for inclusion in the integrated report. More than one sustainability reporting framework may be chosen as relevant to the issuer's business.
    43. For climate-related disclosures, the issuer should refer to paragraphs 4.7 to 4.28 of this Guide. Some issuers have used the Science Based Targets initiative or other sector-specific guidance to guide their GHG emissions reduction targets.
    44. The issuer is expected to follow the chosen framework(s) from year to year and build up its knowledge and understanding of how to report effectively. In turn, it can expect to be building up investors' and stakeholders' understanding, leading to increased confidence. In the absence of regulatory changes, only major changes in business strategy and/or model are likely to require change in sustainability reporting framework. This does not preclude examination of framework relevance from time to time.

      Time horizons used in the sustainability report

    45. In making its sustainability report, the issuer should consider whether it would be useful to report matters for their relevance in the short, medium and long term. Accordingly, sustainability policies, practices, performance and targets would be considered along the same time horizons. The time horizons should be internally consistent with those used for strategic planning and financial reporting (e.g. useful life of assets, impairment testing etc.). Where they are not consistent, the reasons for the inconsistency should be disclosed. Typically the short-term is considered less than one year for banking and financial instruments. For the medium term, the issuer may wish to take reference from their typical planning horizon, investment cycle or plant renewal or other considerations relevant to its business. The long-term should be a useful time horizon over which expectations can be formed and efforts planned.

      Stakeholder engagement

    46. Stakeholder engagement is integral to any business and would be conducted regularly. The issuer should consider ESG factors in their engagement with stakeholders, not just with investors, but also customers, staff, suppliers, regulators, local communities and others in the value chain. The issuer should monitor carefully its communication with stakeholders so as to avoid any information asymmetry as it may lead to unfair trading in the securities market.

      Group and investment holding company reporting

    47. Subject to paragraph 4.48 of this Guide, where holding companies and operating subsidiaries are both listed and have to undertake sustainability reporting, the operating entities can report on the ESG factors within their scope of operations. If the ESG factors are also material to the holding company, the holding company may make reference in its sustainability report to the sustainability reports of the operating subsidiaries. If the holding company has material investee companies which are not subsidiaries, its sustainability report should include the selection and management of these investee companies. 
    48. IFRS S1 requires an issuer to provide disclosures required by the IFRS Sustainability Disclosure Standards as part of its general purpose financial reports. For climate-related disclosures, an issuer may only make reference to other reports published by the same entity (and not the sustainability reports of its operating subsidiaries).
  5. Internal Reviews and External Assurance
    1. Internal reviews and external assurance increase stakeholder confidence in the accuracy and reliability of the sustainability information disclosed.
    2. These procedures over sustainability disclosures should be aligned with the issuer’s existing internal review or external assurance frameworks for other management information, such as financial information or production data.
    3. An internal review of the sustainability reporting process builds on the issuer’s existing governance structure, buttressed by adequate and effective internal controls and risk management systems. The internal audit function conducts the internal review, and may involve relevant functions, such as risk management, sustainability or other specialist functions. The identified processes relating to sustainability reporting should be incorporated into the internal audit plan, which should cover key aspects of the sustainability report; the review may take place over an audit cycle, which may span one or a few years in accordance with risk-based planning, as approved by the Audit Committee. The expectations of the Board, management and other stakeholders should be considered as part of the prioritisation. The internal review should be conducted in accordance with the International Standards for the Professional Practice of Internal Auditing (or any subsequent framework or standard including the International Professional Practices Framework and the Global Internal Audit Standards replacing such standards) issued by The Institute of Internal Auditors. If the issuer has reviewed that certain or all key aspects of the sustainability report has been externally assured, the issuer can, as part of its internal review, determine that no further internal review on such aspects of the sustainability report is required under a risk-based approach. 
    4. An issuer whose sustainability reporting has already matured after several annual exercises would want to undertake external assurance by independent professional bodies to add credibility to the information disclosed and analysis undertaken. The issuer is encouraged to consider independent external assurance on selected important aspects of its sustainability report even in its initial years, expanding coverage in succeeding years.
    5. External assurance involves the engagement of a third party. The scope of the assurance may include a materiality assessment, and cover different aspects of the sustainability disclosures, for example:
      1. data and its associated data collection process;
      2. narratives;
      3. compliance with the specified sustainability reporting framework;
      4. process to identify sustainability information reported; and
      5. compliance with the Listing Rules.
    6. External assurance should be performed in accordance with recognised assurance standards, for example the International Standard on Assurance Engagements (ISAE) 3000 (or any subsequent sustainability-specific standard including the International Standard on Sustainability Assurance (ISSA) 5000), the ISAE 3410, the Singapore Standards on Assurance Engagement (SSAE) 3000 (or any subsequent sustainability-specific standard including the Singapore equivalent of the ISSA 5000), the SSAE 3410, the AA 1000 Assurance Standards or the ISO. 
    7. An issuer that has conducted external assurance should disclose, in the sustainability report, that external assurance has been conducted, including the scope covered, the identity of the external assurer, the standards used, the level of assurance obtained and key findings.
  6. Form and Frequency of Sustainability Reporting
    1. The issuer should report on sustainability at least once a year. An issuer must issue a sustainability report at the same time as the issuance of its annual report. As a transitional measure, where the issuer has conducted external assurance on the sustainability report, it may issue its sustainability report no later than 5 months after the end of the financial year.
    2. The issuer's sustainability disclosure may be done in its annual report. The inclusion of sustainability risks and opportunities with the businesses' other risks and strategy in the same document presents advantages to the user. Alternatively, if more appropriate for the circumstances of the issuer, the issuer may issue a full standalone sustainability report. If an issuer issues its sustainability report after its annual report, it must include a summary of its sustainability report in its annual report.
    3. In either case, the issuer should make available its sustainability reports on SGXNet and on its company website. After a few years of sustainability reporting, the issuer may wish to maintain static information, such as, policies and historical sustainability information, on its website while presenting the current year's changes as well as performance in the annual sustainability report.
    4. To provide sufficient time for preparation, a newly listed issuer (other than an issuer that has an obligation to prepare a sustainability report under local legislation prior to listing) may issue its first sustainability report only in respect of its first full financial year after listing.
  7. Implementation of Sustainability Reporting and Climate-related Disclosures 
    1. For the first year of sustainability reporting, an issuer new to sustainability reporting should have at least the assessment of material ESG factors, policies and/or practices to address the factors; but if their reporting is lacking in qualitative or quantitative descriptions, they need only state progressive targets for reaching maturity of reporting and do their best to meet them in subsequent years. 
    2. For climate-related disclosures, an example of how issuers could report over a few years using the (permanent) structural reliefs and (temporary) transition reliefs in the IFRS Sustainability Disclosure Standards is illustrated in the table below. Issuers may decide on an implementation approach that best suits their circumstance and that complies with the listing requirements.
       

      Illustration of Possible Phased Approach

      Year 1Year 2Year 3
      Qualitative climate-related scenario analysis, with disclosure of reliance on the (permanent) structural reliefs*# Qualitative climate-related scenario analysis, with disclosure of reliance on the (permanent) structural reliefs*# Climate-related scenario analysis with more quantitative outcomes
      Qualitative disclosure of current financial effects of climate-related risks or opportunities as the effects are not separately identifiable or the level of measurement uncertainty is high 
      Qualitative disclosure of anticipated financial effects of climate-related risks or opportunities, with disclosure of reliance on the (permanent) structural reliefs*#      		Qualitative disclosure of current financial effects of climate-related risks or opportunities as the effects are not separately identifiable or the level of measurement uncertainty is high 
      Qualitative disclosure of anticipated financial effects of climate-related risks or opportunities, with disclosure of reliance on the (permanent) structural reliefs*#      		More quantitative disclosures of current and anticipated financial effects of climate-related risks or opportunities, with disclosure of reliance on the (permanent) structural reliefs*# where necessary
      Limited disclosure of the amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities*Disclosure of the amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities*Disclosure of the amount or percentage of assets or business activities vulnerable to or aligned with climate-related risks and opportunities*
      Determined the scope of its value chain, including its breadth and composition, with disclosure of reliance on the (permanent) structural reliefs* Determined the scope of its value chain, including its breadth and composition, with disclosure of reliance on the (permanent) structural reliefs* Determined the scope of its value chain, including its breadth and composition, with disclosure of reliance on the (permanent) structural reliefs* 
      Disclosure of reliance on the (temporary) transition reliefs of (a) not using the Greenhouse Gas Protocol and (b) not providing comparative information in respect of the preceding period Use the Greenhouse Gas Protocol to calculate its GHG emissions
      Comparative information in respect of the preceding period      		Use the Greenhouse Gas Protocol to calculate its GHG emissions
      Comparative information in respect of the preceding period
      For issuers already disclosing Scope 3 GHG emissions, continue to disclose Scope 3 GHG emissions
      For other issuers, to build capabilities to report Scope 3 GHG emissions
      * Using all reasonable and supportable information that is available to the issuer at the reporting date without undue cost or effort
      # Considering the issuer’s skills, capabilities and resources
  8. Glossary
     
    ESG factorsEnvironmental, social and governance factors that affects the issuer's performance and prospects. Also referred to as sustainability issues, or sustainability risks and opportunities. Does not mean philanthropy or other charitable activities.
    Sustainability reportingThe publication of information on material ESG factors in a comprehensive and strategic manner.
    MaterialityIn relation to ESG factors, the most important ESG risks and opportunities that will act as barriers or enablers to achieving business goals in short, medium and long term. The omission or misstatement of these risks or opportunities could influence the decisions of investors.

Added on 20 July 201620 July 2016 and amended on 7 February 20207 February 2020, 1 January 2022, 1 January 2025 and 1 January 2026