Get ready for ISSA 5000

Nascent demand

For now, demand for climate risk assurance in Asia Pacific remains muted, though firms anticipate increased activity once the new standard is in force.

‘In Singapore, demand for climate risk assurance is still at a nascent stage, with the mandatory assurance of Scopes 1 and 2 delayed to 2029,’ says Narissa Chen, partner and head of audit and assurance at Forvis Mazars in Singapore. ‘There has been growing client awareness around the need for external assurance, but this has yet to result in a corresponding noticeable rise in the demand for risk assurance services.’

Chen expects momentum to accelerate once ISSA 5000 takes effect, as regulatory deadlines align with investor expectations for credible, assured climate data. She cites France, where Forvis Mazars already signs climate assurance reports, as a preview of the challenges that Singapore firms will soon face. ‘While demand may look muted today, the curve ahead is steep,’ Chen notes.

Gearing up

Firms are proactively preparing. Forvis Mazars, for instance, is investing in specialist training for partners and managers while aligning with its network’s methodologies, digital platforms and data tools to ensure consistency across borders. The company also works with Singapore regulators and professional bodies to stay aligned with potential transitional measures.

‘Our aim is to ensure that when the standard becomes effective, our teams are not only technically ready but also confident in applying the requirements in the Singapore context,’ Chen explains.

KPMG has taken a similar course. The firm has invested in training and updated methodologies like impact asset valuations, impairment testing, provisions and going-concern assumptions to prepare its professionals. It is also leveraging advanced technologies such as artificial intelligence (AI) to expand assurance capacity.

‘Through our Trusted AI Framework, we ensure that AI is deployed responsibly, supporting climate risk modelling with machine learning, NLP [natural language processing] and predictive analytics, while maintaining ethical and regulatory compliance,’ says Cherine Fok, ESG consulting partner at KPMG in Singapore.

Challenges ahead

Despite preparations, key challenges lie ahead. Many companies still struggle with basic climate reporting, such as identifying material risks, mapping emissions and aligning with international frameworks.

Kee Yin Lai, technology, digital and sustainability consulting partner at Forvis Mazars in Singapore, notes that standards continue to evolve. ‘Until foundations are in place, it is difficult to move quickly into deeper advisory conversations about resilience, transition planning or long-term scenario analysis,’ he says.

Another obstacle is data quality. Unlike financial reporting, climate data spans multiple systems and business units, making it inconsistent and difficult to verify. ‘Without reliable data, the advisory work will be data identification, validation and reporting instead of leveraging on data to develop meaningful strategies,’ Lai adds.

A further challenge is the pace of regulatory and stakeholder demands, which pressures companies to comply even before their systems are ready. To bridge these issues, firms like Forvis Mazars are partnering with environmental, social and governance (ESG) software providers such as EcoOnline to give clients access to advanced ESG and sustainability software for capturing, managing and reporting sustainability data more systematically.

‘By combining these digital capabilities with our advisory expertise, we can ensure that their climate risk strategies are not only compliant, but also credible, data-driven and ready for future assurance,’ Lai notes.

Climate is central

Overall, Singapore firms now view climate risk as central to their audit and advisory practices.

At Forvis Mazars, climate risk is integrated in audit risk assessments and procedures, including evaluations of potential financial implications. On the advisory side, the firm helps clients strengthen governance, internal controls and data processes to advance their disclosures from basic compliance reporting to assurance readiness.

‘Many clients are only at the start of this journey, and our role is to help them progress so that when assurance becomes mandatory, their disclosures can withstand scrutiny,’ Lai explains.

This work leverages the firm’s global network, enabling Singapore teams to adapt lessons from markets with more advanced climate assurance practices. ‘We are not doing this in isolation,’ Chen says. ‘We are plugged into the Forvis Mazars network, drawing on lessons from markets where climate assurance is more advanced.’

KPMG shares the perspective, treating climate risk as fundamental to both financial reporting and strategy. The firm has integrated net-zero transition strategies, enterprise risk management and alignment with frameworks such as the Task Force on Climate-Related Financial Disclosures and the International Sustainability Standards Board.

‘In advisory services, we take a holistic approach of linking climate risk to strategy, transformation, risk management and disclosures,’ Fok notes.