Sustainability Reporting in Singapore: Understanding Scope 1, 2 & 3 Emissions

Sustainability has become a major focus for businesses in Singapore. Across industries, companies are paying more attention to how their operations impact the environment, their employees, and the broader community. Whether through resource management, workplace practices, or ethical governance, sustainability is now part of long-term business strategy rather than a temporary trend.

In Singapore, discussions around sustainability reporting have picked up significantly in recent years. Larger organisations, especially SGX-listed companies, have already integrated formal sustainability disclosures into their reporting structure. More companies are now taking an interest in these topics as expectations evolve — not only from regulators, but also from customers, partners, and investors.

Initially, Singapore planned to expand mandatory climate reporting to large non-listed companies by financial year 2027. However, the implementation timeline has been delayed, giving businesses more time to understand the landscape and prepare internally.

This guide provides a clear explanation of what sustainability reporting is, the basics of Scope 1, Scope 2, and Scope 3 emissions, and how companies in Singapore can begin strengthening their internal processes to stay ready for future developments.

What Is Sustainability Reporting?

Sustainability reporting refers to the process of communicating a company’s performance and impact in three key areas: environmental, social, and governance (commonly known as ESG).

1. Environmental

This focuses on how the business uses resources and manages environmental impact.
Key areas include:

• Energy consumption
  
  
• Water usage
  
  
• Waste management
  
  
• Material usage
  
  
• Greenhouse gas emissions
  
  

2. Social

This relates to how the company treats people — employees, customers, partners, and the community.
Common topics:

• Employee well-being
  
  
• Workplace safety
  
  
• Training and development
  
  
• Diversity and inclusion
  
  
• Community involvement
  
  

3. Governance

This is about how the business is run responsibly and ethically.
Examples include:

• Internal controls
  
  
• Board structure
  
  
• Compliance with regulations
  
  
• Ethical business conduct
  
  
• Risk management
  
  

Together, ESG reporting helps stakeholders understand how responsibly a company operates and how well it manages long-term risks.

Why Sustainability Reporting Matters in Singapore

Even though formal sustainability reporting is not yet required for most businesses, understanding sustainability concepts has become increasingly important. Several factors are contributing to this shift:

1. Alignment with national goals

Under the Singapore Green Plan 2030, the country aims to advance resource efficiency, reduce carbon emissions, and support a green economy. Businesses play a significant role in achieving these objectives.

2. Rising expectations from stakeholders

Customers today prefer brands that act responsibly. Business partners, including multinational companies, often request information on their suppliers’ sustainability practices to ensure responsible sourcing.

3. Global movement toward ESG transparency

International reporting frameworks are becoming more common, especially in regions such as Europe and the Asia-Pacific region. Companies with international exposure may face increasing pressure to disclose more information.

4. Better long-term planning

Understanding sustainability-related risks — from resource scarcity to social responsibility — helps businesses plan strategically and stay resilient.

Sustainability reporting is not only about compliance; it is also about strengthening business foundations, improving efficiency, and building trust.

Understanding Scope 1, Scope 2 & Scope 3 Emissions

A major topic under environmental reporting is greenhouse gas (GHG) emissions. To make emissions easier to understand and compare, global standards classify them into three categories: Scope 1, Scope 2, and Scope 3.

Here is a breakdown of what each scope means:

Scope 1: Direct Emissions from Company Activities

Scope 1 emissions refer to emissions produced directly by assets or activities the company controls.

Examples:

• Fuel used in company-owned vehicles
  
  
• Generators or boilers on company premises
  
  
• Refrigerant leaks from air-conditioning systems
  
  
• Manufacturing emissions from on-site equipment
  
  

These are emissions the business directly creates through its operations.

Scope 2: Indirect Emissions from Purchased Energy

Scope 2 emissions come from the energy a business purchases and uses.

In Singapore, this primarily refers to:

• Electricity consumption
  
  

Although companies do not generate the electricity themselves, the emissions produced during electricity generation are still attributed to the business based on how much electricity it consumes.

Scope 3: All Other Indirect Emissions Across the Value Chain

Scope 3 is the broadest and often largest emissions category. These emissions come from activities not directly controlled by the business but related to its operations.

Examples:

• Employee commuting
  
  
• Business travel
  
  
• Purchased materials
  
  
• Outsourced logistics
  
  
• Waste disposal
  
  
• Supplier activities
  
  
• Use and end-of-life treatment of products
  
  

For many companies, Scope 3 emissions form the majority of their overall carbon footprint due to the breadth of activities included.

Current Status of Sustainability Reporting in Singapore

Sustainability reporting requirements differ depending on the classification of the business.

Here is the updated landscape:

1. SGX-listed companies

Companies listed on the Singapore Exchange must publish sustainability reports. These reports include climate-related disclosures aligned with global standards.

2. Large non-listed companies

Mandatory climate reporting for this group was originally planned for financial year 2027, but the timeline has been delayed. The government is reviewing the schedule and will issue updates accordingly.

3. Small and Medium Enterprises (SMEs)

SMEs currently:

• Do not need to submit formal sustainability reports
  
  
• Are not required to calculate Scope 1, 2, or 3 emissions
  
  
• Are encouraged to gradually learn about sustainability topics and build internal readiness
  
  

For SMEs, the focus right now is on awareness and foundational understanding rather than compliance.

Why Businesses Should Begin Preparing Now

Even with the delayed timeline, gaining early knowledge and strengthening internal processes benefit businesses in several ways:

1. Improved operational efficiency

Tracking resource usage can help identify cost-saving opportunities, such as reducing electricity consumption or minimising waste.

2. Stronger brand reputation

A company perceived as responsible and forward-thinking tends to attract customers, talent, and partners more easily.

3. Readiness for future regulatory changes

When the reporting timeline is finalised, businesses that have prepared early will be able to adapt without significant disruption.

4. Better internal governance

Good documentation, clear processes, and transparent management practices are essential for long-term stability and scalability.

How Accounting & HR Foundations Support Sustainability Readiness

Before businesses even begin thinking about reporting, the first step is building strong internal systems. Many of the elements that support sustainability — such as transparency, data accuracy, and documentation — start with reliable accounting and HR processes.

1. Clear financial records support better decision-making

Accurate bookkeeping helps companies analyse:

• energy-related expenses,
  
  
• operational costs,
  
  
• resource usage trends, and
  
  
• efficiency opportunities.
  
  

This creates a clearer picture of how the company operates.

2. Organised HR processes strengthen governance

A strong HR framework ensures:

• proper employee documentation,
  
  
• transparent workplace practices,
  
  
• compliance with MOM requirements, and
  
  
• clear communication within the organisation.
  
  

These practices contribute to the “Social” and “Governance” pillars of sustainability.

3. Strong documentation sets the foundation for future reporting

If sustainability reporting expands to more businesses in the future, companies with structured financial and HR systems will be much better prepared. Proper documentation today helps reduce administrative challenges later.

Through reliable support in accounting, payroll, HR management, and compliance processes, JWC Accounts & HR helps businesses maintain strong internal foundations that align with good governance and long-term operational readiness.

Build Understanding Today for a Stronger Tomorrow

Sustainability reporting in Singapore continues to evolve, and while mandatory requirements for many businesses have been delayed, the direction is clear: companies are expected to become more aware of their environmental and social impact over time.

By starting with understanding — what sustainability means, how emissions are classified, and why these concepts matter — businesses can make informed decisions and prepare for future developments. Coupled with strong accounting and HR foundations, companies will be ready to respond confidently as expectations continue to grow.