GHG Emissions Calculation and Carbon Accounting

Scope 1 emissions are direct GHG emissions from sources your company owns or controls (e.g., fuel consumed by company vehicles or factory equipment). Scope 2 covers indirect emissions from purchased electricity, steam, or cooling consumed by your company. Scope 3 includes all other indirect emissions occurring across your value chain, such as purchased goods and services, logistics, business travel, employee commuting, and waste management.

Scope 3 emissions often represent the largest share of a large corporation’s total footprint — and for STI-listed companies in Singapore, Scope 3 disclosure is already mandatory from FY2026, meaning they must collect value chain emissions data from their suppliers, including SMEs who are not directly regulated. As multinational corporations strengthen their climate disclosure obligations, they increasingly require suppliers to provide verified emissions data to support enterprise-wide reporting and procurement compliance.

Relying on decentralised, manual spreadsheets creates a high risk of human error, inconsistent reporting, and missing audit trails. Automated ESG software improves data accuracy, centralises reporting, reduces manual effort, and strengthens assurance readiness.

SGX has introduced a phased roadmap for climate-related disclosures aligned with ISSB standards. Scope 1 and Scope 2 emissions reporting is mandatory for all listed issuers from FY2025. Scope 3 reporting starts from FY2026 for STI constituent listed companies only. For all other listed companies, Scope 3 reporting is voluntary until further notice, following the extended timelines confirmed by ACRA and SGX RegCo in August 2025. External limited assurance for Scope 1 and Scope 2 emissions becomes mandatory from FY2029 for all listed issuers.

Carbon accounting is the process of measuring, tracking, and reporting greenhouse gas emissions generated by a business across its operations and value chain. It helps organisations understand environmental impact, identify reduction opportunities, and meet stakeholder or regulatory expectations.

A GHG inventory is a structured record of all greenhouse gas emissions associated with a company’s operations, energy usage, transportation, supply chain, and other activities. It forms the foundation of ESG reporting and climate-related disclosures.

Large enterprises are increasingly required to disclose emissions across their value chains. To comply with these requirements, they need verified emissions data from suppliers, logistics partners, and vendors to calculate Scope 3 emissions accurately.

Many SMEs are not directly mandated under SGX regulations. However, SMEs increasingly face indirect pressure through customer procurement requirements, supply chain audits, export expectations, financing requirements, and enterprise ESG due diligence.

The GHG Protocol is the most widely used global standard for greenhouse gas accounting. Companies may also align disclosures with ISSB, TCFD, GRI, SASB, CDP, or SBTi frameworks depending on business and investor requirements.

Science-based targets are emissions reduction goals aligned with climate science and global decarbonisation pathways, including efforts to limit global warming in line with international climate objectives.

Manufacturing, logistics, retail, food production, chemicals, construction, technology, energy, shipping, and export-oriented industries are among the sectors facing increasing emissions disclosure expectations.

Accurate emissions tracking helps organisations identify operational inefficiencies, reduce energy consumption, optimise resource usage, strengthen procurement competitiveness, improve investor confidence, and reduce long-term compliance risks.

Limited assurance is an independent review conducted by assurance providers to evaluate whether sustainability disclosures and emissions data are materially accurate and prepared according to recognised standards and methodologies.

Depending on operational complexity and data availability, most mid-market organisations can establish an initial GHG inventory within a few months. Scope 3 calculations typically require additional supplier engagement and data collection.

The biggest challenges include incomplete supplier data, inconsistent reporting formats, lack of centralised systems, complex value chains, and difficulties verifying third-party information.

ESG software centralises sustainability data, automates calculations, improves reporting accuracy, supports audit trails, simplifies supplier engagement, and reduces the operational burden associated with manual data management.