The Singapore Exchange (SGX) has tightened climate-related reporting requirements and expanded its suite of sustainable finance products as demand from investors for climate-aligned investments continues to rise.
In its FY2025 sustainability report, the exchange detailed new mandatory disclosure rules, significant growth in green and sustainability-linked products, and progress on its internal decarbonisation targets.
Mandatory climate reporting for all issuers
From FY2025, all SGX-listed issuers must disclose Scope 1 and Scope 2 greenhouse gas (GHG) emissions, following the International Financial Reporting Standards Sustainability Disclosure Standards (IFRS SDS). SGX’s regulatory arm, SGX RegCo, issued guidance last September requiring firms to align reporting with both IFRS SDS and the Global Reporting Initiative (GRI) Standards.
Also Read: SGX turns 25 with historic financials—and a warning for Southeast Asia’s startup ecosystem
To help companies comply, SGX and the Institute of Singapore Chartered Accountants published an Illustrative Sustainability Report and rolled out capacity-building workshops with subsidies for eligible issuers.
Despite these measures, a joint review with the NUS Centre for Governance and Sustainability found gaps remain in disclosures, particularly in climate scenario analysis, integration into risk management processes, and target setting.
Growth in green and climate-linked products
SGX continues to be a leading venue for Asian issuers listing Green, Social, Sustainability, and Sustainability-linked (GSSS) bonds, with over 550 now listed.
Investor appetite for climate-focused exchange-traded funds (ETFs) surged, with assets under management (AUM) in SGX’s six sustainability-themed ETFs rising 133 per cent year-on-year to US$2.2 billion. The iShares MSCI Asia Ex-Japan Climate Action ETF tripled in size since its 2023 launch, driven by inflows from Finnish pension fund Ilmarinen, while the CSOP FTSE APAC Low Carbon ETF added US$75 million.
On the derivatives side, SGX introduced the MSCI Emerging Market Climate Action Index Futures in April, with US$130 million open interest. Its FTSE Blossom Japan Index Futures hold a 93 per cent market share in sustainability-linked Japanese derivatives, with annual notional volume growth of 7.25 per cent.
Subsidiary Scientific Beta was recognised at the ESG Investing Awards for its sustainability indices, which are now referenced by more than US$20 billion in assets. SGX’s iEdge climate and sustainability indices are referenced by a further US$9 billion.
Internal decarbonisation
SGX reported FY2025 absolute emissions of 15,434 tonnes of CO2 equivalent, including 24 tonnes in Scope 1, 3,635 tonnes in Scope 2, and 11,775 tonnes in Scope 3. Emissions intensity stood at 11.9 tonnes of CO2e per S$1 million of revenue.
The group said Scope 2 emissions fell due to data centre optimisation and renewable energy certificate (REC) purchases. It remains on track to cut Scope 2 emissions 42 per cent by FY2031 against a 2021 baseline. Its Scope 3 target–engaging data centre suppliers to set science-based targets–was already achieved in 2022.
Staff training on climate issues exceeded targets, with more than 2,197 hours recorded across the workforce.
Regional and global initiatives
SGX is collaborating with stock exchanges in Malaysia, Indonesia, the Philippines, and Vietnam on a shared digital platform for sustainability data under the ASEAN-Interconnected Sustainability Ecosystem initiative.
Internationally, it hosted the World Federation of Exchanges’s sustainability conference in June and co-chaired the Glasgow Financial Alliance for Net Zero’s index investing workstream, which issued voluntary guidance on transition indices. It also co-led the Climate Transition Plan Advisory Group under the UN’s Sustainable Stock Exchanges initiative.
Operational resilience and governance
SGX reported 100 per cent market uptime in FY2025, with no material disruptions or data breaches. There were 154 trading halts due to public information releases and two pauses from market volatility.
The exchange also highlighted progress on board and management diversity. Women accounted for 41 per cent of board directors (five of 12), above its 30 per cent target. About 30 per cent of senior management roles are held by women.
Context: climate finance pressure
SGX’s measures come as climate finance faces increasing scrutiny. Global climate policy has been disrupted by political shifts such as the US withdrawal from the Paris Agreement, even as COP29 set a goal of mobilising US$300 billion annually for developing nations by 2035.
Also Read: Turbulence and tenacity: How SEA’s startups are turning trade wars into opportunity
For Singapore, aligning with global reporting standards and building deep pools of green capital are seen as crucial to retaining its role as a financial hub. At the same time, reviews show many listed firms are struggling to meet higher disclosure expectations.
Analysts note that the sharp increase in climate-aligned funds reflects growing investor pressure on companies to disclose and cut emissions, but gaps in climate risk reporting raise concerns about the reliability of corporate sustainability claims.
Outlook
SGX said it will review its emissions targets to align with the Science Based Targets initiative’s updated net-zero standards or ISO’s new framework. Market participants expect further product launches as investor demand grows, but warn corporate reporting quality must improve if Singapore is to maintain credibility as a regional hub for sustainable finance.
At stake is whether SGX can balance product growth with regulatory oversight in a fragmented global climate policy landscape. Its tightening of disclosure rules and rapid expansion of climate-focused investment options highlight the exchange’s dual role: building capital markets and policing their integrity in the transition to net zero.
The post SGX tightens climate reporting rules, expands green products as sustainable finance demand grows appeared first on e27.