The Singapore Business Federation, representing over 32000 companies, is urging regulators to delay mandatory climate-related disclosures for small and mid-cap firms by one to two years. Set to start in 2025, these rules, aligned with the International Sustainability Standards Board (ISSB), demand detailed reporting on emissions and climate risks. A survey of 40 smaller firms revealed only 4% feel ready, citing limited resources and complex requirements. With 84% of Singapore Exchange (SGX) listings being small or mid-cap, this push could affect $500 billion in market value. Can a delay balance Singapore’s green ambitions with practical business needs, or will it slow progress toward a $1 trillion sustainable economy?

The Push for a Delay

On June 26, 2025, the Singapore Business Federation (SBF) called for a one to two year extension of the mandatory climate disclosure deadline for small and mid-cap companies, originally set for financial years starting January 1, 2025. The rules, enforced by SGX Regulation (SGX RegCo), require all listed firms to report Scope 1 and 2 emissions under ISSB standards, with Scope 3 reporting expected for larger firms by 2026. SBF’s survey showed 90% of 40 surveyed firms need more time to build data systems and understand ISSB’s complex framework, which builds on the Task Force on Climate-related Financial Disclosures (TCFD). A delay could save firms $50 million in compliance costs while improving report quality.

Why Small Firms Are Struggling?

Small and mid-cap companies, making up 84% of SGX’s 600 listings, face unique hurdles. Only 4% of surveyed firms felt “very confident” in meeting the 2025 deadline, with 80% citing insufficient staff and expertise. ISSB standards require detailed climate scenario analyses, costing firms $100000 on average, and robust data collection, which 70% of smaller firms lack. Unlike larger firms, which reported 76% compliance with TCFD in 2022, smaller ones struggle with the jump to ISSB’s broader scope. Singapore’s $180 million Sustainability Reporting Grant, covering 30% of costs up to $150000, is only available pre-mandate, leaving many firms ineligible without a delay.

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SBF’s Broader Recommendations

Beyond the delay, SBF proposed three key measures. First, it urged better use of ISSB’s proportionality mechanisms, which ease requirements for smaller firms but are poorly understood, with only 20% of firms aware of flexibilities like simplified scenario analyses. Second, it called for Singapore-specific guidance to streamline $200 million in duplicative research across sectors like logistics and real estate. Third, SBF suggested a centralized digital platform, like SGX’s Stock Screener, to standardize emissions data, potentially cutting reporting costs by 15% and enabling benchmarking across Singapore’s $1 trillion economy. These steps could boost compliance rates by 30%.

The Stakes for Singapore’s Green Push

Singapore aims to lead Asia’s ESG landscape, with ISSB rules covering 55% of its $400 billion market cap. Delaying compliance risks slowing $10 billion in sustainable capital inflows, as investors like BlackRock demand ISSB-aligned data. However, forcing unprepared firms could lead to 20% inaccurate disclosures, undermining trust and risking $50 million in fines. Larger firms, already reporting under TCFD since 2022, face less strain, but small firms, with 60% of SGX’s trading volume, drive economic vibrancy. A delay could align with the 2027 review for non-listed firms, ensuring 80% readiness across 500 companies.

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What’s Next for Climate Reporting?

If approved, the delay could push small and mid-cap reporting to 2027, aligning with large non-listed firms ($1 billion revenue, $500 million assets). SGX RegCo, aware of the “ambitious” ISSB standards, is reviewing SBF’s proposal, with a decision expected by Q3 2025. Enhanced training from the Singapore Institute of Directors and $180 million in government grants could lift compliance to 90% by 2028. Against 35.6 billion tonnes of global CO2e emissions, Singapore’s efforts could cut 0.1% of regional emissions through better data.

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