STI30: Index carbon analysis

Our latest Market Snapshot examines emissions trends across Singapore's STI30 index. It highlights emissions reductions in the utilities sector, including the significant impact of strategic corporate decisions about energy transition. We also see important differences between Singapore and Hong Kong, which are relevant to investors looking to increase exposure to Asian markets.

Key Findings:

• Scope 1&2 emissions have returned to 2022 levels
• Top 5 emitters represent ~90% of index emissions (13% of market cap)
• Index faces 36% potential carbon liability under IPCC Net Zero scenario by 2050

The research reveals utilities (-12.9m) saw the largest emissions reduction in 2024. This was primarily driven by Sembcorp's strategic divestment of Indian coal-fired power operations, as part of their transition to green energy. Meanwhile, the industrial sector showed an increase (+1.7m) in emissions attributed to Singapore Airlines' continued operational recovery post-COVID pandemic.

Importantly for market participants wanting to invest in Asia’s growth ‘tigers’, a comparative analysis of the region’s two leading financial centres reveals interesting contrasts in Hong Kong and Singapore’s carbon intensity profiles. Singapore shows marginally higher carbon intensities across most sectors. However, its highest emitters - Singapore Airlines and Sembcorp Industries - have significantly lower carbon intensities when compared with Hong Kong's top emitters and this, to some extent, seems to reflect different appetites to undertake transition to lower carbon.