Get sustainability reporting right

by Annabelle and Rosabel NG for The Business Times, November 8th, 2010.

Pressure for corporate accountability and sustainable, environment-friendly practices will keep rising in a more aware world.

On Aug 28, the Singapore Exchange (SGX) issued a Consultation Paper on a Proposed Policy Statement and Guide to Sustainability Reporting for Listed Companies. The draft Policy Statement sets out broad principles to guide issuers in formulating their sustainability reporting frameworks, and the draft Guide sets out answers to frequently asked questions from listed companies on sustainability reporting as a supplement to the Policy Statement.

The Consultation Paper reflects a global trend that has been gathering steam in the last few years. Increasingly, regulators, investors and the general public are scrutinising the extent to which broader sustainability concerns are addressed by companies in their day-to-day corporate operational and investment decisions. In turn, companies are realising that adopting responsible sustainability practices makes sense, given the increasing value placed on them by the investment community.

Stakeholders are demanding that corporations grow in a sustainable manner, taking into account the impact of their activities on the natural, social, cultural and economic environment in which they operate. For enlightened corporations, over and above the public image boost, implementing such practices can help the bottom line, especially over the longer term. Corporations which have adopted sustainable practices will have a head start. Investors are also calling for more disclosure and greater transparency. Sustainability reporting refers to the practice of corporations measuring and publicly reporting their environmental, social and governance performance to complement traditional financial reporting.

At present, generally speaking, such reporting remains largely voluntary in most countries, except in the area of environmental risks and liabilities, where disclosure may be mandated by their listing rules, such as in Hong Kong, the US and Australia. (continue reading… )

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