Raymond Cheung
Chartered Actuary · CRO · Board Adviser · Singapore
From FY2026, SGX-listed companies must issue a sustainability report alongside their annual report — and large-cap issuers must disclose Scope 3 emissions. Most boards are not ready for what they are now required to sign off on.
I have been in enough audit committee meetings in Singapore to recognise what typically happens when the sustainability report arrives for sign-off. The sustainability team presents. The slide deck covers the ISSB framework alignment, the material ESG factors, the Scope 1 and 2 emissions data. The board chair asks whether everything is compliant. Nobody asks what any of it means for the strategy. The adviser confirms the report meets SGX RegCo's requirements. The board approves. The meeting moves on.
From FY2026, that approach is no longer sufficient — and for some boards, it is now a governance risk. SGX's mandatory sustainability reporting framework has escalated: all listed issuers must now issue their sustainability report alongside the annual report, large-cap companies must disclose Scope 3 greenhouse gas emissions in accordance with IFRS S2, and the board is required to provide a statement on its governance structures for sustainability practices. That last requirement is the one most boards have not fully understood yet.
What has changed for boards — not just for management
The governance shift is this: the sustainability report is now formally a board-level document. Not in the sense that the board reviews it before publication — boards have been doing that. In the sense that the board is now required to describe how it governs sustainability. That means the board needs to understand what is in the report, have a view on whether the identified material ESG factors are the right ones, and be in a position to explain its oversight role to shareholders. Approving a document prepared entirely by management, without engaging with its substance, does not meet that standard.
“Signing off on a sustainability report you cannot explain is a governance risk, not just a reputational one.”
Three questions Singapore boards should be asking this quarter
- Has the board been briefed on the key ESG factors that will appear in the FY2026 sustainability report — and does the board agree they are the right ones, or has the selection been left entirely to management?
- For large-cap issuers: what is management's methodology for measuring Scope 3 emissions, which categories are included, and has the board tested whether the reporting boundary is appropriate for the business?
- If an institutional investor or proxy adviser challenges the sustainability report in a shareholder meeting, which director will respond — and can they answer substantively, not just refer the question to management?
These are not unreasonable expectations. They are what the SGX framework now implies by requiring a board governance statement. If the board cannot answer those questions today, there is still time to put the right briefings in place before the FY2026 report is finalised. But the time is measured in quarters, not years. The requirement is live now.
Common Questions
What does SGX require for sustainability reporting from FY2026?
From FY2026, all SGX-listed companies must issue a sustainability report alongside their annual report. The report must include a board statement on governance structures for sustainability practices. Large-cap issuers are also required to disclose Scope 3 greenhouse gas emissions in accordance with IFRS S2 standards. If external assurance has been conducted, the sustainability report may be issued up to five months after financial year end.
What is the board's responsibility for the FY2026 SGX sustainability report?
The board must provide a statement on its governance structures for sustainability practices — which means the board is expected to actively oversee the sustainability reporting process, not only receive and approve a management-prepared document. Directors should be able to explain how material ESG factors were identified, challenge key assumptions in the report, and describe the board's role in sustainability oversight.
When do large-cap Singapore listed companies need to report Scope 3 emissions?
SGX RegCo requires large-cap listed issuers to report Scope 3 greenhouse gas emissions from FY2026, in line with IFRS S2 requirements. Smaller issuers are not yet required to report Scope 3, though SGX expects the requirement to extend to all listed issuers by FY2027.
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.