Singapore Companies are still lagging behind in Corporate Sustainability Reporting
Posted on September 6, 2011 by derek
SINGAPORE: Singapore companies are still behind when it comes to corporate sustainability reporting. Less than nine per cent of listed companies here conduct such sustainability reporting. This is according to a report by Singapore Compact and despite SGX launching guidelines to spur companies on in June. And to improve on this, industry watchers said that perhaps such reporting standards should be made compulsory in the region.
Reporting water and energy usage for your company will not only help track and streamline business but it also attracts investors. Industry watchers noted that socially responsible investments in the US increased by 13 per cent between 2007 and 2010 to US$3 trillion. Yet, this accounts for just 12 per cent of assets under management in the US.
Jennifer Morris, Executive VP of the Ecosystems Finance & Markets Unit at Conservation International, said: “I think that we are seeing that the trends, even during a downturn in our economy, are increasing. We have really seen in the last three years, an increase in socially responsible investing and certainly in Asia we expect those trends to continue as well.” But for companies to tap into this growing market of investors, analysts said that credible sustainable reporting is needed.
Earlier this year the Singapore Exchange launched a Sustainable Reporting Guide for listed companies. This included recommendations for companies in the pursuit of sustainable reporting. Some analysts said that a regional compulsory system on sustainable reporting should be considered to provide consumers and investors with greater assurance of the credibility of such reports. For many corporations in Singapore, following the path to sustainable reporting is still a gradual one.
Sharad Somani, Partner and Head of Climate & Sustainability at KPMG Singapore, said: “I think most companies are mindful that it should not be increasing the cost base, that they should continue to be competitive. So the first challenge they have is to convince their own management of the utility of all this and how it fits into the big picture.
“The first step we are seeing companies starting to do is their sustainability strategy. The second step is when they go into reporting, it is important what you report is credible and is checked properly. So increasingly, we are seeing companies wanting to report first. So they are getting the management in and then start to report factors which are important first internally, and then reporting to the market.”
And according to recent findings by KPMG, corporations are well on their way to charting sustainable road maps – with a recent study finding that 62 per cent of companies surveyed globally have a strategy for corporate sustainability.
My opinion: Let’s move away from the fact that SGX has released their guidelines, and not treat sustainability reporting as a compliance issue. Instead, we should celebrate the leadership of the 9% of companies in Singapore that already report on sustainability, and think about why they’re doing it in spite of the obvious resistance to such ideas in our market.
I’ll bet that they have several good reasons.