Raymond Cheung
Chartered Actuary · CRO · Board Adviser · Singapore
ACRA has confirmed: Scope 3 emissions reporting is mandatory for STI constituent listed companies from FY2026. The requirement is real, the deadline is imminent, and board directors signing off on this disclosure need to understand what they are approving.
ACRA's extended-timeline announcement confirmed what the SGX roadmap had already set: Scope 3 greenhouse gas emissions reporting is mandatory for Straits Times Index constituent listed companies from FY2026. For non-STI listed companies, Scope 3 remains voluntary for now. If your company is in the STI, this is not a future obligation — it is a current one, and the financial year it applies to is already underway.
What I want to flag is not the technical definition of Scope 3 emissions — your sustainability team already knows that. What I want to flag is the governance implication for board directors who will sign off on these disclosures.
What boards are approving when they sign Scope 3 disclosures
Scope 3 covers all indirect emissions not included in Scope 1 or Scope 2 — primarily the emissions embedded in the supply chain upstream and in the use of products downstream. For most companies, Scope 3 is by far the largest component of total emissions, and it is also the least controllable and the most reliant on estimation, supplier data quality, and methodology choices. What this means in governance terms is that a board signing off on Scope 3 disclosures is approving a set of forward-looking assumptions and estimates that are inherently more uncertain than the operational data in Scope 1 and 2.
The question directors should ask before signing: does the board understand the methodology used to calculate these figures, the data quality limitations, and what 'reasonable' looks like for estimation error given the company's sector and supply chain? If the answer is that the sustainability team produced the numbers and the board noted them, the board has signed a document it has not genuinely reviewed.
“Mandatory means you must produce the number. It does not mean the board understands it. Those are different governance states.”
For STI boards approaching their first mandatory Scope 3 disclosure, the two things I would prioritise before sign-off: a briefing from management that explains the methodology and its limitations in terms a director can challenge — not a summary of the number, but a walkthrough of how it was calculated and what could make it wrong; and a discussion of whether the company's supplier engagement strategy is adequate for the data quality improvements that will be needed as requirements tighten. Building the governance capability now, in the first year, is significantly easier than rebuilding credibility after a flawed disclosure.
Common Questions
Which Singapore companies must report Scope 3 emissions?
Straits Times Index constituent listed companies must report Scope 3 GHG emissions from FY2026 under ACRA and SGX RegCo's mandatory climate reporting roadmap. For non-STI listed companies, Scope 3 reporting remains voluntary until further notice, though Scope 1 and 2 reporting follows a separate mandatory schedule based on company size.
What is Scope 3 emissions reporting and why is it harder than Scope 1 and 2?
Scope 3 covers all indirect emissions across a company's value chain — from supply chain emissions upstream to product-use emissions downstream. It is harder than Scope 1 and 2 because it relies on third-party supplier data, estimated emission factors, and methodology choices that significantly affect the total. For most companies, Scope 3 represents the majority of total emissions, making it both the most material and the most uncertain component.
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About the author
Raymond Cheung is a Chartered Actuary, C-suite executive and board adviser with more than 20 years of experience across Asia in risk management, insurance, ESG and corporate governance. He is the CEO of CER Consultancy and an accredited trainer at SMU Academy and the Singapore College of Insurance.