ISCA CEO, Mr Lee Fook Chiew, was quoted in The Business Times on the question of "How do you see carbon trading as a tool for businesses to reduce their greenhouse gas emissions?" This is what he has to share:
What gets measured gets managed. The upcoming launch of a new global carbon exchange (Climate Impact X) creates a carbon market in local shores, another significant step towards Singapore becoming a sustainability hub.
The establishment of a pricing mechanism creates transparency for carbon-related assets and liabilities, a catalyst to incentivise businesses to innovate to reduce carbon emissions and prepare for a climate-friendly future. Carbon trading also helps businesses reach their climate goals.
The accounting for carbon credits is an evolving topic and the accounting requirements should be enhanced to facilitate high-quality, consistent reporting. We continue to engage and encourage the accounting standard-setters to add such a project to their agenda.
Another evolving aspect is the nexus between the reporting for pollutant pricing mechanisms in the financial statements and for ESG reports. An alignment of the reporting frameworks used would be desirable. In particular, as ESG reporting standards are still at early stages of development, it is important for the two standards setters to cooperate and work closely to avoid unnecessary divergence in requirements. This will also help to avoid or reduce confusion among users of such information.
- Lee Fook Chiew, Chief Executive Officer, Institute of Singapore Chartered Accountants (ISCA)