According to recent research, conducted by Corporate Social Responsibility specialists ‘CSR Asia’ for the accountancy body ACCA, companies in Singapore are currently considerably less active than many of their ASEAN neighbours when it comes to sustainability reporting and as such could be missing out on a potential competitive edge.
This finding was one of the headlines of a report entitled ‘Sustainability Reporting - The Rise of the Report and The Regulator’, a document which discovered that Singapore companies placed fourth out of five ASEAN countries (Singapore, Malaysia, Indonesia, Thailand and The Philippines) in terms of the number of sustainability reports produced by the companies in each country.
The ACCA report also found that the top three industry sectors reporting were amongst those with the greatest social or environmental impact. Namely the electronic & electrical equipment sector with 21 companies reporting, oil and gas scoring 13 and some 10 mining industry companies being found to have reported in the period reviewed.
These findings are further supported by a second independent research, the Asian Sustainability Rating (ASR™), which examines disclosure of sustainability data across ten Asian countries. The ASR report ranked Singapore in fifth place, with South Korea, India and Malaysia coming in first, second and third respectively.
When asked why sustainability reporting is becoming increasingly important CSR Asia’s Country Director (Singapore) Jenny Costelloe explained, “Sustainability reporting or ‘Disclosure’ is rapidly gaining recognition as a critically important business function in no small part due to the global attention being paid to environmental protection and social responsibility. Investors who lead world opinion today expect listed companies not only to achieve good financial results, but also to be accountable and transparent as to how they do this. In other words analysts increasingly want to understand the impact a business has on the environment and communities within which it operates.”
Ms Costelloe continues, “This is why sustainability disclosure represents a massive opportunity for businesses in Singapore. Through their reporting a company can ‘impress’ the analysts and become a much more attractive investment prospect. What’s more, by starting to report sooner rather than later, companies in Singapore can also gain a very clear advantage over those who wait until the activity becomes mandatory as we believe it soon will.”
“So in my opinion, the question should not be why should companies in Singapore report, but why would they not? Sustainability disclosure is in essence the key to future company growth and as such is a business ‘must’.”
The ACCA ‘Sustainability Reporting - The Rise of the Report and The Regulator’ report also touched on what report readers (CSR practitioners and associations, accountants, asset managers, and journalists) felt about the importance of sustainability reports. Findings included the responses that 71% felt that companies were not yet reporting on the significant / material issues. 84% felt that it was important that the report met accepted standards and 88% felt that it was important that reports were independently assured or audited.
To address the need for improved levels and quality of sustainability disclosure in Singapore, the Singapore Stock Exchange (“SGX”) has recently called for feedback on a proposed new policy designed to encourage more listed companies to commit to sustainability practices and reporting. Once feedback has been obtained a sustainability disclosure policy is expected to be adopted by SGX later in 2011.
Some of the benefits of sustainability reporting have been suggested to include:
• Improved trust with an organisation’s stakeholders, such as customers, suppliers and local communities;
• Enhanced attractiveness to investors;
• Operational efficiencies identified by the data collection required for reporting;
• Longer term goal-setting by the disclosing organisation.
Despite the multiple benefits, CSR Asia recognises that disclosure can be a daunting process, often requiring assistance and guidance at the beginning. As an advisory organisation, CSR Asia is well placed to provide this guidance and to provide further support and information, the organisation will be hosting their inaugural Forum on Sustainability Disclosure this March 23rd at the Suntec Convention Centre.
The CSR Asia Forum on Sustainability Disclosure will feature presentations from senior representatives from organisations such as the Singapore Stock Exchange, the Global Reporting Initiative (GRI), Asia Pacific Breweries, KPMG, New Britain Palm Oil and a special session on what investors want to hear from Mr Herman Mulder, the founder of the ethical guidelines for project financing, The Equator Principles.
All together, the day-long forum is designed to assist companies in Asia to better understand likely future reporting environments, the benefits of producing such disclosure and how to manage the process effectively.
For more information on the Forum or to register as a delegate click here http://csr-asia.com/SDForum2011/index.php.