Here’s our pick of the top five developments in CSR for 2014:
1. The rise of sustainability reporting
Globally, sustainability reporting has become a mainstream movement. Earlier in March, United States advocacy group Ceres — whose Investor Network on Climate Risk boasts more than 100 institutional investors with collective assets totalling more than US$12 trillion (S$15.3 trillion) under management — submitted a proposal to the World Federation of Exchanges (WFE), which comprises 60 stock exchanges, to adopt a uniform standard for sustainability reporting.
In another indication that sustainability has become a serious financial concern, assets under management by signatories to the United Nations-supported Principles for Responsible Investing (PRI) now stand at more than US$45 trillion, up from US$4 trillion at the PRI’s launch in 2006.
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Separately, in Singapore, the Singapore Exchange announced moves to mandate sustainability reporting for all listed companies, following countries in Asia such as China, Taiwan, and Malaysia, where bourses already require listed companies to publish sustainability reports in some form.
2. Asian awareness on sustainability on the rise
The clearest indicator that the conversation on sustainability is maturing in Asia was the launch of the region’s first sustainability index by Singapore broadcaster Channel NewsAsia. The index identifies firms leading in corporate sustainability across 10 Asian economies: China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand.
The Channel NewsAsia Sustainability Ranking, developed in partnership with consultancy firms CSR Asia and Sustainalytics, lists the top 100 companies in Asia in terms of sustainability performance. The companies were selected based on their performance across a broad range of environmental, social and governance (ESG) indicators tracked by Sustainalytics. The top three positions went to India’s Tata Consultancy Services, Singapore’s City Developments and Unilever Indonesia respectively.
3. Materiality matters
Companies this year have had to prepare for new international standards for sustainability reporting - the new G4 Guidelines published by the Global Reporting Initiative (GRI), an international non-profit organisation which develops sustainability reporting standards for use around the world.
The G4 Guidelines will be applicable to all sustainability reports published after 31 December 2015. They are notable for several new requirements: firstly and most importantly, reports following the G4 Guidelines must focus on materiality. Materiality is an accounting principle that describes how important something is. In terms of sustainability reporting, materiality means that the report should focus mainly on those issues that are most important to the business and its shareholders.
4. Movement against corruption
In June, the United Nations Global Compact (UNGC) launched a new initiative that petitions governments to implement anti-corruption practices and support good governance systems. The campaign, ‘Call to Action: Anti-Corruption and the Global Development Agenda’, marks the tenth year of the inclusion of the tenth UNGC principle, which is focused on anti-corruption.
Corruption continues to be a critical challenge for businesses, noted UNGC Executive Director Georg Kell. “It was clear a decade ago – and remains today – that corruption so profoundly corrodes sound business practice and good governance, and thus our ability to realise the other nine principles,” added Kell.
The UNGC, which was formed in 2000, seeks companies’ support to implement and adhere to its ten principles - centred on human rights, labour, environment and anti-corruption.
5. The business case for responsible business
Evidence is rising that prove that improving a company’s social and environmental performance will save money, enhance profitability, and generate more business value. This is backed by a new report released by the non-profit Carbon Disclosure Project in October, which found that S&P 500 companies that built sustainability into their core strategies are outperforming those that failed to show leadership in this area.
Separately, United Nations Development Programme administrator Helen Clark this year urged wider society to remove barriers that have held women back from taking leadership roles, pointing out that companies that include women in decision-making perform better.
Speaking at the inaugural lecture at the UNDP Global Centre for Public Service Excellence in Singapore, Ms Clark said women’s leadership in the private sector is beginning to receive increased attention and that the corporate sector is the “last bastion of male dominance of top positions”.
This story is part of our Year in Review series, which looks at the top stories that shaped the business and sustainability scene in each of our 11 categories.