Developments in sustainable finance continued in the third quarter, albeit at a slower pace during the summer months.
Regulators in key regions — including the EU, Australia and Singapore — pressed ahead with important updates. These ranged from enhanced climate disclosure requirements to advancing sustainability reporting standards, ensuring that sustainability remains firmly on the financial markets’ agenda.
WISF’s Regulatory Affairs Department summarised the updates of the last quarter.
European Union
Corporate Sustainability Reporting Directive (CSRD): The EU Commission published the Draft FAQs in August 2023 to clarify provisions under the CSRD, EU Taxonomy and the Sustainable Finance Disclosure Regulation (SFDR). These FAQs aim to improve the implementation of corporate sustainability reporting rules.
ESMA (European Securities and Markets Authority): In July, ESMA initiated a Common Supervisory Action to assess compliance of asset managers with SFDR and the EU Taxonomy, addressing greenwashing risks and promoting harmonized sustainability disclosures.
EFRAG (European Financial Reporting Advisory Group): EFRAG added 23 new explanations to support the implementation of the European Sustainability Reporting Standards (ESRS), taking its total to 93 in 2024.
Australia
On September 9, 2024, Australia passed a law for mandatory climate-related disclosures aligned with the ISSB (International Sustainability Standards Board) standards, effective January 2025. These disclosures include comprehensive climate scenario analyses and value chain reporting.
Additionally, Australia released an interim report on the development of a sustainable finance taxonomy in September 2024, as part of its broader efforts to drive private investment towards net-zero goals.
Singapore
The Singapore Exchange Regulation (SGX RegCo) announced in July 2024 a roadmap for incorporating the IFRS Sustainability Disclosure Standards into Singapore’s sustainability reporting framework. From FY 2025, all listed companies in Singapore will be required to disclose their Scope 1 and 2 greenhouse gas (GHG) emissions, with further integration of climate-related information into their sustainability reports. Larger companies must disclose their Scope 3 emissions by FY 2026.
Recognizing the complexity of Scope 3 emissions reporting, SGX RegCo outlined a phased implementation plan. While larger companies will begin mandatory reporting in 2026, smaller issuers will follow a more gradual timeline, allowing them to adapt to the complexities of Scope 3 emissions and other sustainability-related disclosures.
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