Communication for Sustainable Development

More firms starting to issue sustainability reports

KPMG Headquarter on 345 Park Avenue in New Yor...Image via Wikipedia
With increasing global attention being paid to issues of environmental protection and social responsibility, companies are beginning to issue sustainability reports.

According to estimates, the number is picking up and will involve some 3,000 companies worldwide this year.

Such reports allow investors to look beyond a company's standard financial reporting to their management of environmental and social matters.

In Europe, some analysts estimate that 17 per cent of investments are in sustainable-related funds, and in the US, they make up around 11 per cent.

Comparatively, the numbers in Asia are small. But experts say there are signs of growing investor interest in such funds.

Sharad Somani, executive director, Global Infrastructure & Projects, KPMG, said: "There are a lot of funds now which are socially responsible investors ... 

"So for companies that want to tap into these kind of funds, and which will grow in volume going forward and which will be more important in Asia, we believe that if you are to tap these funds, you will have to be seen to be doing concrete actions to be sustainable.

"The second big thing we are seeing is that most of the Asian companies are exporting to a lot of European and American companies.

"And a whole lot of American and European companies are looking at their entire value chain - which essentially means - where they source the products from, are they following the best practices, or are they sustainable.

If the companies do not start changing the way they function in order to be more sustainable, it may directly impact their ability to do business with these companies, and also being competitive."

Stock exchanges in the region have been making efforts to encourage their listed companies to boost transparency through sustainability reporting.

The Singapore Exchange recently issued a "Policy Statement on Sustainability Reporting", while Bursa Malaysia mandated sustainability reporting in 2006.

Devanesan Evanson, chief market operations officer, Bursa Malaysia, said: "One of the challenges faced by public-listed companies is guidance. The listed companies wanted guidance about the process of disclosure.

"And to that extent as an exchange, what we have done is publish a framework, a framework to guide listed companies in making the CSR statement.

"Basically, this framework looks at four areas. First and foremost, it looks at the community - how they can have CSR activities in relation to the community, and the market place, and your workplace among your employees."

Others added that sustainability is not only becoming a regulatory requirement but also a business imperative.

Graham Owens, director, PAIA, said: "When you are supplying to companies, they have got their own set of sustainability criteria that they have to meet themselves.

"So if you help them with that, then you could become a preferred supplier in that sense. So by producing a report and allowing people to access what you are doing along your supply chain, then you are making it easy for them.

"You are also making it easy for investors to make an informed decision as to whether they should look at your company as good future potential in terms of development."

Currently within Singapore, the Philippines, Thailand, Indonesia and Malaysia, only about 130 companies produce sustainability reports.

- CNA/al

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