SGX Climate Reporting, Bursa Malaysia Sustainability Reporting, and Scope 1, 2 and 3 Explained for Boards

Climate and sustainability disclosure has moved from voluntary good practice to a core board responsibility in Singapore and Malaysia. Investors, lenders, and regulators now expect companies to report emissions, climate risks, and governance over those risks with the same discipline they apply to financial statements. For directors, the challenge is not only to understand the rules but to ask the right questions before a report is signed off.

This article covers the climate reporting requirements of the Singapore Exchange (SGX), the sustainability reporting framework of Bursa Malaysia, and the Scope 1, 2 and 3 emissions categories that sit at the centre of both regimes. It closes with a practical checklist for boards and a note on the governance and ESG conversations that matter most in the region.

Why Boards Need to Understand These Rules

Sustainability reporting used to sit with a small team of communications or ESG staff. That is no longer realistic. A sustainability report is a public document that carries legal and reputational weight, and the board is responsible for overseeing the risks and opportunities it describes. When a company reports that its emissions have fallen, or that climate risk has been assessed, directors need to be able to explain how those conclusions were reached.

Three questions help frame the discussion at board level:

• What must we disclose? The answer depends on your listing venue, market capitalisation, and the reporting standards that apply to you.
• How reliable is the data? Emissions figures, risk assessments, and targets need documented methods and clear ownership.
• What does the board do with the information? Disclosure is only useful if it informs strategy, capital allocation, and risk appetite.

SGX Climate Reporting Requirements

The SGX-ST requires each listed issuer to publish an annual sustainability report, and this requirement is designed to add transparency and encourage efficiency and innovation. Under the SGX rulebook, climate-related disclosures sit within the sustainability report and must follow the requirements set out in Practice Note 7.6.

The Core Principles

For climate-related disclosures, SGX expects issuers to report based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and to follow the chosen framework from year to year. The TCFD structure is built around four areas:

1. Governance: How the board and management oversee climate-related risks and opportunities.
2. Strategy: The actual and potential impacts of climate risks and opportunities on the business, and how strategy would hold up under different scenarios.
3. Risk management: How climate risks are identified, assessed, and integrated into the overall risk management process.
4. Metrics and targets: The indicators, including greenhouse gas emissions, used to measure and manage climate risks, and the targets set against them.

Who Must Report Emissions

All listed issuers must disclose Scope 1 and Scope 2 greenhouse gas (GHG) emissions. STI constituents must also provide other climate-related disclosures. Linklaters notes that the mandatory climate reporting regime applies to all issuers listed on the Singapore Exchange, so the regime is broad even though some obligations are phased or tiered.

Because requirements can be phased, boards should not rely on a summary from an earlier year. Check the current text of Practice Note 7.6 and the SGX sustainability reporting guidance each financial year, and confirm your company’s obligations with your external auditors or sustainability advisers.

What a Strong SGX Climate Disclosure Looks Like

A good climate disclosure does more than list numbers. It should:

• Describe the board’s oversight, including which committee reviews climate matters and how often
• Explain the material climate risks and opportunities, with time horizons
• Set out how these risks affect the business model, costs, supply chain, and asset values
• Report emissions with the boundaries, methods, and base year clearly stated
• Show targets and progress, with honest explanations where targets have been missed

Bursa Malaysia Sustainability Reporting

Bursa Malaysia has moved its sustainability reporting onto the International Sustainability Standards Board (ISSB) framework. Its amended listing requirements, effective from December 2024, align with the National Sustainability Reporting Framework (NSRF), and the sustainability statement must follow the IFRS Sustainability Disclosure Standards.

The Structure of the Requirement

The Malaysian approach is built on two IFRS standards:

• IFRS S1: General requirements for disclosure of sustainability-related financial information, covering governance, strategy, risk management, and metrics.
• IFRS S2: Climate-related disclosures, including physical and transition risks, greenhouse gas emissions, and climate targets.

In-scope companies must prepare a sustainability statement under IFRS S1 and IFRS S2, and publish it in the annual report at the same time as the financial statements. The rollout is phased. Bursa Malaysia’s media release indicates that the first group of Main Market companies applies the IFRS Sustainability Disclosure Standards for annual reporting periods starting on or after 1 January 2025, followed by the remaining Main Market listed companies on a later timetable. The IFRS Malaysia jurisdictional profile also refers to applicability dates for IFRS S1 and IFRS S2 that extend into later years.

Because the timelines differ by company category, the practical step for every board is to confirm three things: which group your company falls into, the first financial year in which the standards apply, and whether any transitional relief is available for particular disclosures.

Practical Implications for Malaysian Boards

The move to IFRS S1 and S2 changes the nature of the report. Disclosure is no longer a narrative exercise. Boards should expect:

• More structured questions from auditors and investors about data quality
• Clear links between climate risks and financial planning
• Stronger expectations on governance evidence, such as committee minutes and risk registers
• Consistency between the sustainability statement and the rest of the annual report

Scope 1, 2 and 3 Explained for Boards

Greenhouse gas emissions are grouped into three scopes. These categories are used in both SGX and Bursa reporting, so every director should be comfortable with what they mean.

Scope 1: Direct Emissions

Scope 1 covers emissions released directly from sources that the company owns or controls. Examples include fuel burned in company boilers, vehicles, and generators, along with emissions from processes such as manufacturing or refrigerant leaks.

For a board, Scope 1 is the most within the company’s direct control. Reductions often come from equipment upgrades, fuel switching, fleet management, or process changes.

Scope 2: Indirect Emissions from Purchased Energy

Scope 2 covers emissions from the generation of electricity, heat, steam, or cooling that the company purchases and consumes. The emissions occur at the power station, but they are counted in the company’s inventory because the company creates demand for that energy.

Scope 2 reductions can come from energy efficiency, on-site renewable generation, and renewable energy procurement. Boards should ask whether the company reports Scope 2 using a location-based method, a market-based method, or both, and why.

Scope 3: Value Chain Emissions

Scope 3 covers all other indirect emissions across the value chain, both upstream and downstream. These can include purchased goods and services, business travel, employee commuting, transport and distribution, use of sold products, and end-of-life treatment.

Scope 3 is often the largest category for service businesses and many manufacturers, and it is also the hardest to measure. Data comes from suppliers, customers, and third parties, and the quality of that data varies. Boards should expect management to explain:

• Which Scope 3 categories are material to the business
• How the data was collected, and where estimates have been used
• What the company is doing to improve supplier data
• How Scope 3 targets link to procurement and product decisions

A Simple Way to Remember the Scopes

• Scope 1: What we burn or release directly
• Scope 2: What we buy as energy
• Scope 3: What happens across our suppliers, customers, and products

Questions Every Board Should Ask

Directors do not need to calculate emissions, but they do need to test whether the process is sound. These questions can guide a board discussion before approving a sustainability report.

1. Governance: Which committee oversees climate and sustainability risk, and how often does it review progress?
2. Scope and boundaries: Which entities, sites, and operations are included in the emissions inventory, and which are excluded?
3. Base year and methods: What is the base year, and has it been recalculated for acquisitions, disposals, or methodology changes?
4. Data quality: Which figures are measured, which are estimated, and what controls check them?
5. Assurance: Has the sustainability data been independently reviewed, and at what level of assurance?
6. Scope 3 coverage: Which categories are material, and what is the plan to improve supplier data?
7. Targets: Are targets science-based or otherwise credible, and how are they linked to executive remuneration, if at all?
8. Consistency: Do the sustainability statement, annual report, and investor presentations tell the same story?

Building a Reporting Process That Works

Strong disclosure depends on a repeatable process rather than a last-minute effort. A practical approach has five stages.

Stage 1: Map your obligations. Confirm your listing venue, your category or group under the applicable rules, and the first reporting period that applies to you.

Stage 2: Set the boundary. Decide which entities and operations are included, and document the reasons for any exclusions.

Stage 3: Collect and control the data. Assign owners for each data source, from utility bills and fleet records to supplier questionnaires. Build review steps and keep an audit trail.

Stage 4: Link the data to decisions. Use the results to set targets, review capital expenditure, and update the risk register.

Stage 5: Review and assure. Hold a board or committee review before publication, and prepare for external assurance where required.

Speaking on Governance and ESG in Singapore and Malaysia

Regulation alone does not make boards effective. Many directors and executives find the most useful learning comes from practical discussion, case examples, and clear explanations of what the rules mean for their own organisation. This is where governance keynotes and ESG speakers add value.

Dr Sivanesan is a speaker who works on governance, risk, compliance, and ESG topics, and public sources describe his work with conferences and board workshops in the region. For event organisers and training coordinators, the most useful sessions tend to combine three elements: an accurate summary of the rules, a clear explanation of the board’s role, and a short workshop where participants test a real disclosure or risk question.

For a governance keynote in Singapore, audiences often value a session that links SGX requirements with board oversight, audit committee responsibilities, and investor expectations. For an ESG session in Malaysia, the focus usually shifts to Bursa’s IFRS-based requirements, supply chain data, and the practical steps needed to prepare a sustainability statement.

Before you book any speaker, confirm their current availability, topics, and biography directly with them or their representative. Ask for a sample agenda, check that their examples reflect the current rules, and make sure the session will be useful to your specific audience.

Final Thoughts

SGX and Bursa Malaysia have each set clear expectations for climate and sustainability reporting. SGX requires listed issuers to report climate-related information based on TCFD principles and Practice Note 7.6, with Scope 1 and 2 emissions disclosure for all listed issuers. Bursa Malaysia has moved to the IFRS S1 and S2 standards through the NSRF, with phased timelines for different groups of companies.

The Scope 1, 2 and 3 framework gives boards a common language for emissions. Scope 1 covers what the company emits directly, Scope 2 covers purchased energy, and Scope 3 covers the wider value chain. Directors do not need to become technical experts, but they should understand the boundaries, the data quality, and the links between emissions, risk, and strategy.

The best approach is to start early, confirm your obligations, build a repeatable process, and ask searching questions before each report is approved. Good disclosure protects the company, builds trust with investors, and gives the board the information it needs to lead.