The entity shall disclose its absolute gross greenhouse gas emissions generated during the reporting period, expressed as metric tonnes of CO₂ equivalent, classified as Scope 1, Scope 2 and Scope 3 greenhouse gas emissions. (IFRS S2 Paragraph 29(a)(i)) 

Why do greenhouse gas emissions matter?

Greenhouse Gases (GHG) such as carbon dioxide, methane and nitrous oxide trap heat in Earth’s atmosphere, keeping Earth habitable. Yet excessive emissions from industrialisation have caused heat to accumulate, driving global warming and climate change. Intensified flooding disrupts shipping lanes and damages infrastructure, while heatwaves trigger food inflation and energy crises. Climate change is now a threat to financial stability.  

In response, the Paris Agreement—to which Singapore is a signatory—aims to limit global temperature rise to 1.5°C through global net-zero emissions by 2050. Consequently, GHG emissions have become a key metric for investors and financial institutions when assessing an entity’s environmental performance, climate strategy, and regulatory alignment in capital allocation decisions. 

Calculating emissions with the GHG Protocol 

The entity shall measure its greenhouse gas emissions in accordance with the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (2004) unless required by a jurisdictional authority or an exchange on which the entity is listed to use a different method for measuring its greenhouse gas emissions. (IFRS S2 Paragraph 29(a)(ii))

As noted in our previous article, IFRS S2 identifies GHG emissions as a cross-industry climate-related metric and refers to the GHG Protocol for scope definitions and calculation guidance. Under IFRS S2, entities must disclose absolute GHG emissions in metric tonnes of CO₂ equivalent, classified as:

Emissions calculation begins with understanding your business activities and mapping your value chain to ensure all relevant emission sources are captured. Start by identifying the activity data and supporting documents you will need: What equipment or vehicles are used daily? Where are utility bills stored?  

Follow our simplified six steps to calculate and report emissions: 

Should I consider external assurance on my GHG emissions data?

While IFRS S2 does not explicitly require external assurance on GHG emissions, obtaining third-party verification enhances the credibility of disclosures by ensuring accuracy, methodological consistency and governance oversight.

Assurance is not merely a compliance exercise. The process—reviewing internal controls, data aggregation across business units and locations, and the appropriateness of activity data and emission factors—helps entities identify data gaps, strengthen reporting processes and gain a clearer understanding of their GHG inventory. This lays a strong foundation for a credible decarbonisation pathway.  

In Singapore, mandatory external limited assurance on Scope 1 and 2 GHG emissions has been deferred to FY2029, giving entities additional time to refine data collection and consolidation processes ahead of future requirements. 

When and how can I set an emission reduction target?

Once entities are confident in their emissions calculation and have established a mature inventory with several years of data, the next step is to set emission reduction targets. Beyond supporting global decarbonisation, this can cut operational costs through efficiency improvements and strengthen market competitiveness by demonstrating accountability to climate-conscious stakeholders. 

For practical guidance on setting SMART emission reduction targets, refer to our article “Tracking and Targeting”. 

Next steps for reporting  

A robust GHG inventory relies on continual improvement of data accuracy and reliability. Some entities may overlook material emission sources or struggle to access up-to-date emission factors. These challenges can be addressed by deepening understanding of business activities and emission types, maintaining a central data management file to document emission factors and calculation steps and seeking external verification to enhance credibility. As data quality improves and multi-year records accumulate, entities can better analyse trends, set reduction targets, and chart a clear decarbonisation pathway.

For further guidance, refer to the “Metrics and targets” section of IFRS S2 for disclosure requirements, and the GHG Protocol for detailed calculation methodology.