Singapore businesses still far from mandatory climate assurance requirements

As the countdown to mandatory climate reporting assurance requirements for Financial Year 2029 continues, the majority of Singapore businesses are still in early stages of sustainability assurance preparedness. That is according to PwC research.

The study, which surveyed companies of all sizes in Singapore, found that there is a wide range in how companies are preparing for mandatory climate reporting. So far, only 17% of the businesses surveyed have secured external assurance for their sustainability reports, with large companies dominating this segment.

“Our study noted that whilst larger companies are leading the way in sustainability assurance, the wider market still lags significantly, and there are notable gaps between large and smaller companies that need to be addressed,” said Lee Bing Yi, Partner at PwC.

He added that while the timeline for mandatory sustainability assurance has been extended, companies should not take the additional time lightly. “It is crucial that companies make good use of this time to build capacity towards credible reporting and assurance readiness.

Data management

A key part of preparing for reporting is ensuring that data management is complete and aligned with reporting needs. The study found that 67% of larger, non-STI constituents are using a mix of generic and ESG-specific systems for data collection and reporting. Among STI constituents, this figure rises to 86%.

However, nearly half (48%) of smaller, non-STI companies continue to depend on manual spreadsheets for sustainability data collection. According to PwC, this approach comes with risks, and these companies face a clear opportunity to improve data accuracy and efficiency through digitalisation efforts.

“A shift to modern and cutting-edge technologies helps mitigate risks associated with human error by enabling automated checks, audit trails, and standardised processes,” said Bing Yi.

The finance function

Across the board, PwC’s report also noted limited involvement of the finance function in sustainability report – an observation that is applicable to both large and smaller companies alike. 65% of companies surveyed engage their finance departments either minimally or not at all in the sustainability reporting process currently.

However, this is expected to change with the adoption of ISSB standards, which highlight the need for closer alignment between sustainability and financial disclosures, thereby placing greater importance on the role of finance in integrated reporting efforts.

This integrated reporting approach requires finance teams to work closer together with other parts of the business – especially those that house ESG data. “Stronger collaboration across functions is needed, especially as the connection between sustainability and finance continues to deepen,” said Terence Lam, Director of Advocacy & Professional Standards at ISCA.

The report calls for companies to build assurance maturity across three key areas: process, systems, and people. “Formalising governance over processes, investing in digitalisation efforts, and upskilling teams will be critical for companies to meet increasing regulatory and stakeholder expectations for transparent, high-quality sustainability disclosures,” concluded Bing Yi.