Singapore’s Top 100 Companies Found to have Outperformed the Global Average in Sustainability Reporting: KPMG
In recent times, sustainability reporting has grown steadily, with 79% of leading global companies now providing sustainability reports, a marked increase from only about two-thirds of these companies doing so 10 years ago, according to KPMG's 2022 Survey of Sustainability Reporting.
KPMG’s survey evaluates the largest 100 companies, also known as the N100, in each of 58 countries or jurisdictions every two years, or 5,800 companies in total.
At present, the Asia Pacific (APAC) region leads with 89% of its companies undertaking sustainability reporting. This is followed by Europe at 82%, the Americas at 74%, and the Middle East and Africa at 56%.
While North America and Western Europe emerged with the highest overall reporting rates, the Middle East and Apac regions stood out on integrated reporting. Meanwhile, Latin America stands out in biodiversity reporting, and Africa stands out in social and governance reporting.
Meanwhile, the world’s top 250 companies – the G250 – are almost all providing some form of sustainability reporting, with 96% of this group reporting on sustainability or environmental, social, and governance (ESG) matters.
Based on the Fortune 500 list for 2021, the G250 is made up of the top 250 companies by revenue.
However, KPMG’s findings reveal that there remains a disconnect between the urgency of addressing climate change and social equity, and the “hard results” provided by businesses.
In Singapore, the sustainability reporting rate grew by 19% to 100% in 2022, up from 81% in 2020 for the country’s top 100 companies.
Cherine Fok, partner at KPMG ESG at KPMG Singapore, said:
"In this latest report, Singapore takes the lead for sustainability reporting globally. This is a good sign of progress and shows that the country is committed to keeping the climate promises it made in the past.
"With the groundwork being laid, we can look forward to a deepening in the next phases of sustainability reporting, with more focus placed on complex aspects such as climate impact modelling, analysis of the socio-economic impacts arising from climate change, and a clearer link between sustainability performance and enterprise value.”
In particular, Singapore companies have scored better than the global average for material topics identified, reporting of carbon reduction targets, the inclusion of ESG information in their annual reports, acknowledging climate change as a financial risk to business and in terms of governance when it came to appointing a member of the board or leadership team to be responsible for sustainability as well as including sustainability within compensation.
There has been marked improvements in companies reporting carbon reduction targets, but action remains too slow in key related areas, with less than half of companies currently recognising biodiversity loss as a risk.
However, KPMG observes that among the thousands of reports analysed, less than half of the world’s largest companies provide reporting on the ‘social’ and ‘governance’ components of ESG.
The report notes how ESG disclosures continue to be overwhelmingly narrative-driven rather than publishing quantitative or financial data regarding impacts, which is clearly an area of improvement for companies around the world.
As a result, KPMG's report outlines some concrete ways businesses can invest in sustainability reporting. These include understanding stakeholder expectations, including materiality assessments in reporting, aligning reporting to mandatory or voluntary frameworks, investing in quality non-financial data management, and understanding how climate change and social issues affect business.
Source: The Edge Singapore