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Singapore lags behind in sustainability reporting

Companies in Singapore are not as actively involved in sustainability reporting as their Asian counterparts, a survey has found.

The survey, conducted by the ASEAN CSR Network and the Centre for Governance, Institutions and Organisations (CGIO), part of the National University of Singapore, covered corporate information over two years from the start of 2014 to the end of last year.

Based on the top 100 listed companies in Indonesia, Singapore, China and Thailand, Singapore comes last with only 71% of companies reporting on sustainability issues, considerably lower than the 100% shown by the other three.

However, when it comes to the quality of disclosure of sustainability reports Singapore ranks higher with 48.8%, Indonesia at 48.4%, Malaysia at 47.7%, and the highest figure shown by Thailand at 56.8%.

Singapore may however see a rise in the number of companies that conduct sustainability reporting as the Singapore Exchange (SGX) recently introduced a ‘comply or explain’ sustainability reporting initiative, in an effort by the government to step up its commitment to the environment.

Singapore-listed companies will be expected to present a sustainability report at least once a year and must cover five components including: practices and performance targets; material ESG factors; policies, sustainability reporting framework and the board statement.

Companies will be expected to implement the ‘comply or explain’ initiative from financial year ending on or after 31 December 2017.

Commenting on the matter, the Small and Middle Capitalisation Companies Association (SMCCA) said it "welcomes SGX's Sustainability Reporting Guide".

"SGX has softened many requirements ... in view of reducing anxiety to small- and middle-capitalisation companies when implementing this report," added the SMCCA.

GRI framework
Singapore performs slightly better when it comes to the adoption of the Global Reporting Initiative (GRI). The survey revealed that in Singapore 21 companies adopted the framework, higher than Malaysia where the number of companies adopting GRI is 18.

That’s however lower than Indonesia where 28 companies adopted it. Thailand has the highest number of companies adopting GRI at 38, the survey revealed.

Companies in Singapore that do not adopt GRI but rather ‘seek external assurance’ is very low (the same as Indonesia) at four, Malaysia at nine, and Thailand 13.

Based on the results it appears that there is a direct link between the use of the GRI framework and the quality of disclosure, which is generally higher when GRI is implemented.

Although listed companies in the four Asian countries recognise the significance of sustainability reporting, they cannot identify “its key impact, rise and opportunities,” stated the report.  However, they are continually progressing and working towards improving the quality of disclosure, the survey read.

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