Singapore urges businesses to act as climate rules tighten

Singapore urges businesses to accelerate climate transition efforts as regulatory requirements tighten and global markets demand sustainability. Officials warn that companies delaying action may struggle to compete in an increasingly carbon-conscious economy.

Speaking at the Singapore Business Federation Dialogue, the country’s Ambassador for Climate Action stressed that the shift toward a carbon-constrained world is inevitable. He cited three key forces driving the transition: politics, economics and nature. While shifting political landscapes create uncertainty, the declining cost of renewable energy and worsening climate crises make sustainability unavoidable. Businesses must act now or risk losing their market position as investors and clients prioritize lower-carbon products.

Singapore is advancing its climate commitments, targeting net-zero emissions by 2050. Measures include raising the carbon tax and importing low-carbon electricity to supply one-third of its energy by 2035. Regulators are also tightening climate-related disclosures. A recent study by Singapore Exchange Regulation and the National University of Singapore found that fewer than a third of listed companies fully comply with recommended climate disclosures. A major gap is Scope 3 emissions reporting, which covers supply chain emissions.

New rules will require listed firms to report under International Sustainability Standards Board (ISSB) guidelines starting in 2025, with larger companies disclosing Scope 3 emissions from 2026. While SMEs have more flexibility, those supplying multinationals must align with stricter sustainability standards to remain competitive.

In 2023, nearly 6,000 companies disclosed climate transition strategies, a number expected to rise as sustainability becomes a business priority. Unlike some global counterparts easing climate policies, Singapore strengthens regulations, signaling that sustainability is a long-term necessity.

The Ambassador said that businesses cannot afford to wait. Companies that act now on emissions tracking, renewable energy adoption and regulatory compliance will gain a competitive edge in an evolving economic landscape.