Singapore Proposes Mandatory Climate Disclosure, Keeps Broader ESG Voluntary

Singapore's Accounting and Corporate Regulatory Authority has opened a public consultation on draft Singapore Sustainability Disclosure Standards, running from 27 July to 25 October 2026. The draft standards, developed by ACRA's Interim Sustainability Standards Committee, propose making only the climate-specific disclosure standard mandatory while keeping the broader sustainability disclosure standard voluntary, a deliberate divergence from the International Sustainability Standards Board framework the local standards are otherwise based on. Alongside the consultation, ACRA has launched a Sustainability Assurance Body of Knowledge to build the auditing capability needed to verify climate disclosures credibly.

 

Why Singapore Is Mandating Climate Disclosure Only

 

The draft standards mirror the ISSB's two-standard structure, with SFRS S1 covering general sustainability-related financial disclosure requirements and SFRS S2 covering climate-specific disclosures, based respectively on IFRS S1 and IFRS S2. Rather than mandating both standards together, as some jurisdictions have done, Singapore's Interim SSC proposes making only SFRS S2 mandatory, leaving SFRS S1's broader sustainability disclosures voluntary for now.

That sequencing reflects an explicit prioritisation decision the consultation itself states plainly: given the urgency of climate change, mandatory reporting is scoped to climate disclosures first, with broader sustainability topics remaining voluntary in this initial phase. That approach lets companies build reporting infrastructure and capability around the single most urgent and internationally standardised disclosure category before expanding into the wider range of environmental, social and governance topics IFRS S1 covers, a staged rollout that mirrors how several other jurisdictions have phased in comprehensive sustainability reporting requirements rather than mandating the full scope simultaneously.

 

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Why Assurance Capability Is the Less Visible but Critical Piece

 

Alongside the disclosure standards themselves, ACRA is launching a Sustainability Assurance Body of Knowledge, outlining the competencies needed for professionals who will verify companies' climate disclosures independently. That launch addresses a structural bottleneck that mandatory disclosure regimes elsewhere have encountered: requiring companies to disclose climate information means little if there are not enough qualified assurance providers available to verify that the disclosed information is accurate and reliable, since disclosure without credible assurance risks becoming a box-ticking exercise rather than genuinely trustworthy reporting.

ACRA chief executive Chia-Tern Huey Min explicitly framed meeting the mandatory reporting and assurance requirements as a multi-year journey for both preparers and assurance providers, language that acknowledges building the professional capability to audit sustainability disclosures credibly takes considerably longer than simply writing the disclosure rules themselves. The assurance body of knowledge builds on a separate Sustainability Reporting Body of Knowledge launched in May 2025, and ACRA is working with the Skills and Workforce Development Agency and training providers to develop programmes aligned with both frameworks, alongside course subsidies of up to 90 percent under the SkillsFuture Green Workplace Programme.

 

How This Fits the Global Pattern of ISSB Adaptation

 

Singapore's approach of adopting the ISSB framework's structure while making local adjustments mirrors a pattern playing out across multiple jurisdictions adopting international sustainability disclosure standards. The draft standards include tailored transition reliefs and a requirement for a formal statement of compliance aligned with Singapore's specific implementation roadmap, adjustments intended to make the international framework workable within local market conditions and corporate reporting maturity rather than adopting the ISSB standards unmodified.

Esther An, co-chairperson of the Interim SSC, framed climate reporting as having moved beyond a compliance exercise into a strategic imperative, arguing the disclosure standards would give companies a consistent framework to measure, manage and communicate climate-related risks and opportunities. Co-chairperson Max Loh described the draft standards as striking a balance between international alignment and practical relevance for Singapore businesses, and encouraged companies, investors and professional bodies to submit feedback during the consultation period.

 

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What Happens Next

 

The Interim SSC is particularly seeking feedback from listed and non-listed companies, investors, assurance providers and professional bodies, with submissions accepted through the government's REACH consultation portal until 25 October 2026. Separately, the government's existing Sustainability Reporting Grant, which currently supports companies preparing their first ISSB-aligned sustainability reports, will be reviewed once the Singapore-specific standards are finalised, suggesting the financial support mechanism will eventually shift to align with the local rather than the pure international framework.

Whether the decision to mandate only climate disclosure while leaving broader sustainability reporting voluntary proves durable as Singapore's reporting ecosystem matures, and whether the assurance capability-building effort keeps pace with the growing number of companies required to produce climate disclosures under the finalised standard, will determine how credible and enforceable Singapore's climate reporting regime becomes once the consultation period closes and the standards take final form.

 

Source: The Accounting and Corporate Regulatory Authority (ACRA)