Singapore's Scope 3 Emissions Reporting: Gaps & Solutions
Key Takeaways
94% of Singaporean organisations are not fully measuring or analysing Scope 3 emissions.
Only 39% of business leaders have a strong understanding of Scope 3 emissions.
Lack of resources, expertise, and technology hinder Scope 3 emissions reduction efforts.
Accountants are crucial for effective sustainability reporting, including Scope 3 emissions.
A joint study by Schneider Electric and the Institute of Singapore Chartered Accountants (ISCA) reveals that 94% of Singaporean organisations are not fully measuring or analysing Scope 3 emissions.
This lack of comprehensive reporting impacts their readiness to meet upcoming climate-related disclosure requirements set for 2025 and 2027.
The report, "Counting to 3: Navigating Singapore’s Emissions Journey Together," surveyed over 500 senior business leaders from various industries, including small and medium-sized enterprises (SMEs) and large multinational corporations.
Starting Point: Knowledge Deficit
Only 39% of respondents have a strong understanding of Scope 3 emissions, compared to higher awareness of Scope 1 and 2 emissions. Senior executives have better knowledge due to more access to emissions management briefings. However, all organisational levels must understand Scope 3 to implement necessary changes effectively.
Inaction Linked to Knowledge Gaps
While 76% of business leaders have conducted feasibility studies on Scope 3 emissions, only 6% are fully measuring and analysing these emissions. This lag leads to lower confidence in meeting Scope 3 targets, with only 27% believing these are achievable compared to 40% for Scope 1 and 31% for Scope 2 emissions.
Organisational Groupings Based on Scope 3 Progress
The report categorises organisations into four groups based on their Scope 3 emissions management progress: High Adopters (10%), Moderate Adopters (30%), Low Adopters (38%), and Emerging Adopters (22%). Financial Services and Education & Professional Services sectors lead in High Adopters, while Food, Hospitality & Tourism has the most Emerging Adopters.
Barriers to Progress
Key barriers to advancing Scope 3 emissions reduction include lack of resources, expertise, and suitable technology. High and Moderate Adopters cite human resource shortages as the primary obstacle, whereas Low and Emerging Adopters struggle with technological infrastructure.
Yoon Young Kim, Cluster President of Schneider Electric Singapore and Brunei, says, "Yoon Young Kim, Cluster President, Schneider Electric Singapore and Brunei said, “Scope 3 presents the next frontier of emissions management and still unchartered territory for many organisations in Singapore. Education is critical for advancing Singapore’s green agenda. We see correlations throughout the findings of this study that a lack of understanding of key areas of management of greenhouse gas (GHG) emissions leads to a lower level of planning, target setting, and ultimately action.
"At Schneider Electric, we are deeply committed to meaningful and thorough emissions management, and we are constantly growing our capacity to help partners strategise, digitise and decarbonise. But as with all initiatives to tackle climate change, everyone needs to be in lockstep on this journey: government and private sector businesses of all sizes and across all industries. Schneider Electric, together with ISCA, hopes this report shines a light on the most pressing areas that need to be addressed if we are to make the changes that will facilitate Singapore’s path to net zero.”
Accountants' Role in Sustainability Reporting
Accountants and finance professionals are well-positioned for sustainability reporting due to their expertise in financial reporting, data analysis, and ensuring transparency.
Kang Wai Geat, Divisional Director of Professional Standards at ISCA, says, “Sustainability is a megatrend that is reshaping the accountancy profession. Increasingly, organisations are turning to the accountancy profession for sustainability reporting and assurance. To take full advantage of the opportunity to help organisations advance their emissions agenda, accountants must upskill and reskill to keep up with the latest developments in sustainability.
"The accountancy profession is key to reporting sustainability performance to shed light on how companies earn their profits. Having consistent and comparable sustainability reporting will help stakeholders make informed decisions in support of sustainability. ISCA is delighted to collaborate with Schneider Electric to delve deeper into GHG scope 3 emissions management and reporting.”
Understanding Greenhouse Gas Emissions
Greenhouse gases are categorised into three groups:
Scope 1: Direct emissions from an organisation’s activities.
Scope 2: Indirect emissions from buying and using power.
Scope 3: Emissions from upstream and downstream activities, such as manufacturing and transportation.
This comprehensive study aims to guide Singaporean organisations in improving their Scope 3 emissions management and achieving net-zero targets.
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Source: ISCA
