Friday, August 01, 2014

Singapore Companies Laggards in Sustainability Reporting

Sustainability Reporting Guidelines issued by the Singapore Exchange in 2010 have fallen on deaf ears as indicated by the findings of the latest study of sustainability reporting practices of listed companies in Singapore.
The second edition of much awaited study report about Sustainability Reporting in Singapore among Singapore Exchange Mainboard listed companies has been released. The report, carried out by Singapore Compact for CSR and NUS Business School, paints a grim picture of sustainability reporting among Singapore companies. The study covered 537 companies listed on the Singapore Exchange to gauge the level of their sustainability reporting. Here are the key findings:
  1. Only 19 companies issue a proper sustainability report using GRI guidelines. The 2011 Study had found 11 companies with GRI-based reports.
  2. Companies in the Manufacturing, Services and Commerce sectors are the biggest laggards.
  3. Only 160 companies had some kind of mention of sustainability in their annual report or the website.
  4. Environmental issues were the most neglected aspects by those with any sustainability information.
  5. Only 17 companies made any reference to Climate Change.
  6. Only 22 companies made a reference to material issues.
  7. Only 32.1% companies from the high impact sectors, categorized so by the Singapore Exchange, provided some information about their sustainability practices. These sectors include Agriculture, Air Transport, Chemicals & Pharmaceutical, Construction, Food & Beverages, Forestry & Paper, Mining & Metals, Oil & Gas, Shipping and Water.
Study findings are not surprising for sustainability professionals. Sustainability has a very low buy-in at the CEO level in Singapore. CEOs don't see much value in sustainability agenda. The SGX guidelines expect listed companies to disclose their sustainability performance but are voluntary. In the absence of regulatory requirement, a vast majority of companies have chosen to ignore the guidelines.
Christopher Ang, Executive Director of Singapore Compact, says: “More companies need to communicate and report on their sustainability activities to gain a deeper understanding of their exposure to social and environmental risks, and demonstrate corporate transparency and accountability. Such insights can also help companies find growth opportunities and generates trust with their stakeholders, while providing drivers for companies to formulate long-term strategic visions and resilient business models.”
Associate Professor Lawrence Loh, one of the researchers and Deputy Head, Department of Strategy & Policy, NUS Business School says: "Companies should see that it is in their own interests to report on sustainability. Increasingly, many stakeholders, including investors, are expecting companies to go beyond mere engagement and to also communicate their commitment to sustainability efforts. Being sustainable is the most fundamental assurance for the long-term survivability and viability of the companies."
Good advice. Hope CEOs are listening!

See the full report here.