With evolving regulations around climate change it's more critical than ever for directors in Singapore to stay ahead. The 4th edition of Directors’ Duties Navigator: Climate Risk and Sustainability Disclosures is a valuable resource for understanding the legal and regulatory landscape, liability risks and more, enabling directors to make informed decisions on effective #ClimateRisk management. Climate Governance Initiative Commonwealth Climate and Law Initiative (CCLI) Climate Governance Singapore Singapore Institute of Directors #SID #Sustainability #ESG #GovernanceForGood
🌏 Climate Risk & Directors’ Duties in #Singapore 🌏 How should Singaporean directors address the growing challenges of #ClimateRisks? The 4th edition of our Directors’ Duties Navigator (linked in comments 👇) produced with the Climate Governance Initiative has the latest on evolving laws and regulations shaping corporate governance. 🌟 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐚𝐧𝐝 𝐫𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐚𝐩𝐩𝐫𝐨𝐚𝐜𝐡𝐞𝐬 𝐭𝐨 𝐜𝐥𝐢𝐦𝐚𝐭𝐞 𝐜𝐡𝐚𝐧𝐠𝐞 🌟 ▶️ Singapore has committed to achieving net zero emissions by 2050. ▶️Carbon Pricing (Amendment) Act 2022 raises carbon taxes progressively to S$45/tCO2e by 2026, potentially reaching S$80/tCO2e by 2030. Directors, particularly of companies with high emissions, should be alert to the potential increased costs this could entail. ▶️The Monetary Authority of Singapore (MAS) launched a final public consultation on a green and transition taxonomy for financial institutions. ▶️Government estimates S$100 billion would be required to combat rising sea levels and climate change. 📖 𝐈𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬 𝐟𝐨𝐫 𝐝𝐢𝐫𝐞𝐜𝐭𝐨𝐫𝐬' 𝐝𝐮𝐭𝐢𝐞𝐬 📖 🪟 𝘚𝘶𝘴𝘵𝘢𝘪𝘯𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘙𝘦𝘱𝘰𝘳𝘵𝘪𝘯𝘨 Singapore has adopted a phased approach aligned with the Taskforce on Climate-related Financial Disclosures (TCFD). ▶️ From FY25, all listed companies must report on climate-related issues using standards aligned with the ISSB frameworks. ▶️ From FY26, listed companies will be required to disclose Scope 3 emissions. ▶️ From FY27, certain large non-listed companies will need to provide climate disclosures. 🌡️ 𝘔𝘢𝘯𝘢𝘨𝘪𝘯𝘨 𝘊𝘭𝘪𝘮𝘢𝘵𝘦 𝘙𝘪𝘴𝘬𝘴 A #LegalOpinion (linked in comments) by Jeffrey Chan Wah Teck, S.C. and others, concluded that: ▶️Directors in Singapore are obliged to take into account climate change risks, particularly insofar as those risks are or may be material to the interests of the company. ⚖️ 𝐏𝐨𝐭𝐞𝐧𝐭𝐢𝐚𝐥 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲 ⚖️ ▶️ Directors may be held criminally liable under Singaporean environmental sustainability and climate change statutes for failing to ensure that their companies have in place principles and systems for compliance. 🌿𝐁𝐢𝐨𝐝𝐢𝐯𝐞𝐫𝐬𝐢𝐭𝐲 𝐑𝐢𝐬𝐤 🌿 Regulatory focus on #biodiversityloss as a material financial risk may be increasing. ✳️ 𝐁𝐞𝐬𝐭 𝐩𝐫𝐚𝐜𝐭𝐢𝐜𝐞 𝐟𝐨𝐫 𝐝𝐢𝐫𝐞𝐜𝐭𝐨𝐫𝐬 ✳️ ▶️ Integrate climate and #biodiversity risks into #corporatestrategy and #riskmanagement frameworks to mitigate liabilities. ▶️ Regularly review physical and transition risks posed by #climatechange, including impacts on asset valuations and financial performance. ▶️ Engage external experts to address gaps in knowledge and ensure a comprehensive understanding of environmental risks. 💡 Read the full section for more! 🌻 Many thanks to the authors Richard Allen, Min-tze Lean, Yuan-Bing Mock, and to Andrew Martin for his comment. Baker McKenzie Wong & Leow Climate Governance Singapore Singapore Institute of Directors