23 May 2025
On 31 January, UNGCNS held its first in-person event with panel discussions around the takeaways of COP28 and what this means for businesses in Singapore.
The event welcomed Guest-of-Honour Joseph Teo (Chief Negotiator for Climate Change, Ministry of Sustainability and the Environment) who provided an insightful keynote presentation on the COP28 discussions that took place around climate change adaptation and mitigation.
Two plenary sessions, on “The Transition away from fossil fuels and acceleration of renewable energy supply in Singapore” and “The case for greater climate disclosure and transparency to accelerate the journey to net zero emissions” were also held, with speakers having had experience at previous COPs.
In this article, we summarize some of the relevant takeaways from the two plenary sessions:
One of the main outcomes of COP28 was the creation of the Global Renewables and Energy Efficiency Pledge, which saw 123 states, including Singapore, signing it. The Pledge called for the tripling of renewable energy capacity and doubling energy efficiency improvements on a global scale by 2030. In Singapore, where fossil fuels still form the major source of energy, promoting energy efficiency is one of the key ways for companies to reduce their emissions. On that note, retrofits to existing buildings and infrastructure would be one way for companies to improve on their energy efficiency. Examples of retrofits include changing to more efficient LED lighting, switching to glazed windows which provide better insulation, and upgrading to more efficient air-conditioning and compressor systems.
At the same time, it is important for companies to design with energy efficiency in mind, so that their facilities and operations do not have to use as much energy in the first place. Examples include buildings designed to allow more sunlight to stream in which lowers the need for lighting, more green cover, and better insulation which lowers the need for cooling.
Moving one step further, companies can also plan for integrating energy storage in their operations to enable them to maximise the utilisation of renewable energy for their operations. Due to Singapore’s climate which can reduce the generation of solar energy, energy storage helps companies cope with the intermittency of renewables, enabling them to tap on the energy stored when the sun is not shining, and in turn save on electricity costs by depending less on the grid.
The global transition to a low-carbon economy will disrupt traditional emissions-intensive industries such as oil and gas, aviation, maritime, and semiconductors, especially if such industries don’t take steps to operate in a lower-carbon manner. Emerging green industries such as the renewable energy sector will also need talent as they expand to support the growing green economy’s needs.
With that, companies can seize the global low-carbon transition as an opportunity to pivot their business to support the low-carbon economy. In so doing, they should look at upskilling and reskilling their staff on the relevant sustainability knowledge and skillsets, which would enable them to contribute to the company’s sustainability pivot, as well as enable staff to acquire relevant skillsets in the low-carbon economy.
In turn, it will be helpful for companies to look at the type of skills they will need to grow their business sustainably, considering the increasing sustainability demands and requirements of their clients, investors, and in the jurisdictions which they operate. Beyond skillsets such as sustainability reporting, and carbon management, transferable skills which staff already apply in their current job scopes, such as project management, will be useful as well.
Climate change will bring about various risks that negatively affect a company’s financials and this has led to rising expectations by investors for companies to report the risks that climate change will have on their financial performance, as well as their climate transition plans.
Such expectations have led to the development of climate-related disclosure standards such as the Task Force on Climate-Related Financial Disclosures (TCFD) Recommendations and, more recently, the two standards by the International Sustainability Standards Board (ISSB) – the IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1) and IFRS S2 Climate-related Disclosures (IFRS S2).
It would hence be critical for companies to start thinking about and communicating their climate transition plans should they wish to continue being an investable company.
At the same time, with the various climate and sustainability-related disclosure standards out there besides those mentioned above, such as the standards by the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB), it can be confusing for companies to know which standards to align with.
On a positive note, recent efforts have been made to harmonise the ‘alphabet soup’ of sustainability-related disclosure standards. The ISSB’s IFRS Standards seek to become the global baseline of sustainability-related disclosure standards, incorporating both the TCFD Recommendations and SASB Standards. At the same time, the ISSB and GRI have been working together to achieve coordination and interoperability in both their standards.
In the evolving landscape of climate-related disclosures, companies can look to local regulations as a start. For example, in Singapore, the Sustainability Reporting Advisory Committee (SRAC), an industry-led committee set up by ACRA and SGX, has announced recommendations to require listed companies to start reporting ISSB-aligned climate-related disclosures from FY2025, with the same requirement applied to large non-listed companies from FY2027.
With the increasing focus on sustainability and climate related risks to inform businesses’ and investors’ decision-making, Singapore has taken proactive steps to gradually make sustainability reporting a requirement for companies in Singapore.
This includes the latest SRAC’s recommendations to make sustainability reporting a requirement for selected non-listed companies in the near future. With the bracket of companies expected to report their sustainability impacts widening, this will trickle down to smaller companies in the value chain who have to track their own sustainability impacts to serve the sustainability requirements of their bigger clients. This includes reporting of their own scope 1 and scope 2 emissions to feed into the scope 3 emissions reporting by their larger clients.
This reflects the need for smaller companies to build their capacity in sustainability so they will be prepared to meet the incoming demands by their stakeholders, even if they may not be directly affected by national regulatory requirements yet.
Besides climate-related disclosures, there has also been increasing calls for companies to look into their impacts on biodiversity, as reflected by the creation of the Taskforce on Nature-related Financial Disclosures (TNFD) Recommendations. The TNFD aims for companies to report on the risks and opportunities associated with nature-related risks such as biodiversity loss and ecosystem degradation. While this may be relatively new to companies given that reporting on nature-related risks has not been a common practice, the TNFD Recommendations should be slightly more accessible to companies, as the TNFD builds on the TCFD model which is already relatively familiar to companies.
Overall, sustainability and climate-related disclosures are a means for companies to continually look at aligning long-term business growth with sustainable development. Companies can look to the requirements and demands from their various stakeholders (government, customers, investors etc.) as they craft and refine their sustainability policies and in turn, business strategies.