Charting materiality amongst Singapore’s sustainability reporters

With the Singapore Stock Exchange’s (SGX) announcement this year that sustainability reporting is to be introduced on a comply or explain basis for all listed companies from the end of FY2017, understanding Environmental, Social and Governance (ESG) material issues has never been more important.

Up to 700 companies will soon have to start publishing their ESG risks and ultimately tackling the all-important question, what is relevant to us in the world of sustainability? Material issues, defined by the Global Reporting Standards (GRI) as issues “that reflect a reporting organisation’s significant economic, environmental and social impacts,” and a company’s process of defining these (the ‘materiality assessment’) will form the inevitable backbone of the reporting process for these new reporters.

As hundreds of companies begin the process of assessing their material issues and prioritising these risks and opportunities, Paia has conducted research on what are the material issues that matter for Singapore’s current sustainability reporters?

Which issues stand out, and what processes are companies using to decide on their material issues? By analysing the material issues and materiality process of all 40 Singapore companies currently producing sustainability reports to an internationally recognized standard (such as GRI or the Integrated Reporting Framework (IR)) it is possible to get some insight into that elusive question, just what makes the cut in Singapore and what does that mean for sustainability reporting?

Singapore’s most material issues

The majority of Singapore’s reporters have used the global standard for sustainability reporting, GRI as the basis for their materiality assessment.

On the whole, Singapore’s reporters align their material issues with GRI’s predefined topics, for most there may just be one or two issues that are not aligned. This is good news, as the updated GRI Sustainability Reporting Standards (released 2016) encourage companies to align their material issues to GRI’s predetermined list, so that companies are reporting on standardised issues, and therefore standardised KPIs.

To note, many companies included some sector specific issues, beyond those provided by GRI. This is most prominent among agricultural reporters who prioritised sector specific issues such as smallholder rights and peatland degradation.

Paia’s analysis has identified the 6 most reported material issues out of the 40 Singaporean companies, as shown in the chart.

These are issues that the majority of Singapore’s reporters have identified as key material issues. Singapore’s most material issue—Occupational Health & Safety—is material to 80% of all GRI reporters, with those companies that don’t include this as a key material issue primarily falling into the financial services sector.

Yet it is an important caveat that even for issues not ranked as a key material issue, companies may still disclose performance data, so for example, even for companies not ranking Energy or Water as a key material issue, they will typically still disclose performance data around these issues inline with reporting expectations.

Paia’s analysis has identified the most reported performance indicators, as shown in the tables here. [Read More]

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