Singapore leads with new funding initiative for sustainability reporting

March 19, 2024

The Singaporean government has recently unveiled a pioneering Sustainability Reporting Grant to aid companies in covering up to a substantial 30% of the expenses involved in generating their inaugural sustainability reports.

According to ESG Today, this development comes on the heels of the government’s declaration last week to enforce mandatory climate-related reporting requirements for both listed and large non-listed companies. These requirements are to be aligned with the standards set by the International Sustainability Standards Board (ISSB) of the IFRS Foundation, setting a timeline for compliance starting in 2025 for listed companies, and extending to 2027 for large non-listed entities.

During a speech at the Ministry of Trade and Industry’s (MTI) Committee of Supply Debate, MTI Minister of State, Low Yen Ling, highlighted the imperative for businesses to develop the necessary capabilities and resources to accurately track and report their carbon footprints. “To this end, we will provide funding support of up to 30% to large companies to kickstart their sustainability reporting journey,” Ms Low Yen Ling articulated.

The necessity for this grant stems from the escalating costs associated with the fulfilment of non-financial disclosure obligations globally. A study by the ERM Sustainability Institute reveals that corporate issuers are currently spending an average of $533m annually on climate-related disclosure, encompassing GHG analysis, climate scenario analysis, and the management of internal climate risk controls. The U.S. Securities and Exchange Commission has also projected a substantial initial cost for its proposed climate reporting rule, indicating a first-year expense of $640m, with annual ongoing costs for issuers standing at $530m.

Administered by the Singapore Economic Development Board (EDB) and Enterprise Singapore (EnterpriseSG), the new grants aim to support large companies with annual revenues exceeding $100m. These companies can avail themselves of financial aid to defray up to 30% – capped at S$150,000 (USD$112,000) – of the expenses required to prepare their first sustainability report.

Moreover, the Singaporean government has not overlooked the needs of small and medium-sized enterprises (SMEs). Ms Low Yen Ling announced plans to provide SMEs with funding support covering up to 70% of the costs associated with engaging carbon service providers and compiling their first sustainability reports. This SME-specific program is slated for launch later this year, with additional support covering 50% of the costs for the subsequent two years through EnterpriseSG.