Experts Call For More Sustainability Reporting In Singapore

Online, March 16, 2011 (Newswire.com) - A roundtable discussion, hosted by ACCA and facilitated by CSR Asia in Quarter 4, 2010 found that there is a compelling case for increased sustainability disclosure in Singapore. Following an announcement by the Singapore Stock Exchange in August 2010, which encourages more sustainability disclosure by listed and soon-to-list companies, the panellists confirmed that more companies should produce regular public disclosure on sustainable business practices in order to compete in a global market, to enable more informed investment decisions and to meet stakeholder expectations.

The panel comprised some of Singapore's key opinion leaders and the discussion covered topics such as the business case for disclosure, the challenges of sustainability disclosure, a response to the SGX announcement, external assurance of sustainability reports and various reporting formats. The findings are summarised below:

1. In favour of sustainability reporting:
i. There is a distinct trend towards more sustainability reports

All the panellists supported sustainability reporting and they conceded that there is a trend towards more sustainability disclosure and reporting of a higher quality. The proponents of sustainability reporting described the benefits for external stakeholders, who demand increasingly detailed information, and the positive impact for managers wishing to improve the sustainability of their businesses.

ii. More disclosure is required to improve investors' decision-making

From an investor's perspective, it was agreed that more disclosure would improve investors' understanding of businesses and create an opportunity for dialogue between companies and the investment community.

iii. There were mixed views regarding mandatory sustainability reporting

There was some disagreement about whether sustainability reporting should be mandatory or voluntary, with some panellists saying that mandatory reporting should not be too prescriptive, nor should it be an immediate requirement, whilst others felt that it was the right approach to get companies to report. Most panellists felt that it was important to have certainty from SGX on the expected timeline for the move towards mandatory reporting.

2. Challenges with sustainability disclosure:
i. Companies should choose their own, most appropriate reporting format

The challenges of sustainability disclosure referred to in the Roundtable discussion included the complexity of measuring some aspects of sustainability and the diverse expectations of an increasingly discerning stakeholder population. From a practical perspective, choosing the best framework for a sustainability report was cited as a challenge, as was the scale of a sustainability reporting process - especially for SMEs.

3. Comments on the SGX announcement :
i. More guidance and support required for smaller companies

The consensus was that the SGX announcement was a positive move for businesses and for Singapore. However, some of the panel expressed the need for more guidance and support for smaller companies and non-reporting companies to enable them to produce good quality reports.

4. Assurance
i. Too premature to make external assurance for sustainability reports mandatory

Sustainability report assurance was discussed and recognised as valuable for the credibility of the report - but it was considered that it should not be the primary concern of companies which are producing their first sustainability report, but as a longer term goal.

5. Report Format
i. There is a trend towards integrated reporting

The majority of the panel felt that sustainability reporting was moving towards an integrated format, combining financial with environmental, social and governance data in one document.

The panel envisaged an increase in the numbers and in the quality of sustainability reports in the next three to five years, although an improvement in quality was not expected by all panellists in the short term.

Sustainability reporting describes the consideration and integration of environmental and social dimensions into traditional financial reporting to develop a holistic approach towards corporate disclosure. In the narrowest sense, sustainability reporting refers to the publication of environmental, social and governance (ESG) information in an integrated manner that reflects activities and outcomes across these three dimensions of an organisation's performance.

Darryl Wee, Country Head ACCA Singapore said, "The roundtable discussion confirmed the belief held by ACCA that sustainability disclosure is increasing in importance. Though there may be challenges facing companies in Singapore in producing reports or improving current reports, we see and encourage the accounting profession in assisting businesses embrace the wider responsibility of sustainability reporting."

"ACCA Singapore has always taken a proactive role in the sustainability agenda through its Awards Scheme, conferences and workshops. ACCA will also shortly be launching an updated version of the ACCA sustainability guidebook which provides a framework and direction for companies who want to embark on sustainability reporting,'' added Darryl Wee.

Erin Lyon, Executive Director of CSR Asia, who facilitated the Roundtable, said, "The comments at the roundtable emphasised the importance of a move away from glossy publicity brochures towards material and transparent sustainability reports. To deliver this, companies will have to allocate time and resources to accurately reflect their sustainable business practices. It is clear that in Singapore we need to respond to trends in sustainability reporting if we are to remain globally competitive."

Based on the Roundtable findings, CSR Asia has produced a report for ACCA, which will be distributed to key stakeholders.