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• The most recent findings from KPMG reveal that sustainability reporting has grown steadily, with 79 % of main world firms offering sustainability experiences
• In Singapore, sustainability reporting price grew by 19 % to 100% in 2022, up from 81 % in 2020 for the nation’s high 100 firms.
• There was marked enhancements in firms reporting carbon discount targets, however motion stays too gradual in key associated areas, with lower than half of firms at present recognising biodiversity loss as a threat
• Among the many 1000’s of experiences analysed, lower than half of the world’s largest firms are offering reporting on ‘social’ and ‘governance’ elements of ESG

SINGAPORE – Media OutReach – 18 October 2022 – Singapore’s high 100 firms[1] have outperformed the worldwide common in sustainability reporting for six out of 12 indicators (see Desk 1) in KPMG’s 2022 Survey of Sustainability Reporting which surveys the biggest 100 firms (termed as ‘N100’) in every of 58 nations or jurisdictions each two years, or 5,800 firms in whole. These Singapore firms have additionally elevated their sustainability reporting price to 100% in 2022, up 19 % in comparison with 2020 – increased than the 2022 world common which is 79 %.

The Asia Pacific area leads with 89 % of its firms endeavor sustainability reporting. That is adopted by Europe (82 %), the Americas (74 %) and the Center East and Africa (56 %). Regional variations had been noticed within the contents of sustainability reporting, largely pushed by top-of-mind issues and regulatory variations. Whereas North America (97 %) and Western Europe (85 %) emerged with the very best general reporting charges, the Center East (55 %) and Asia Pacific area (30 %) stand out on built-in reporting. In the meantime, Latin America (50 %) stands out on biodiversity reporting and Africa stands out on social and governance reporting (51 % and 49 %, respectively).

Globally, there was a gentle and constant enhance in reporting from the N100. Ten years in the past, round two-thirds of the N100 group of firms supplied sustainability experiences and the determine now stands at 79 %. In the meantime, the world’s high 250 firms – often known as the G250 (the G250 pattern includes the highest 250 firms by income based mostly on the 2021 Fortune 500 rating) – are nearly all offering some type of sustainability reporting, with 96 % of this group reporting on sustainability or ESG issues. Nonetheless, the findings reveal that there’s nonetheless a disconnect between the urgency of addressing local weather change and social fairness, and the ‘laborious outcomes’ supplied by companies.

The International Reporting Initiative (GRI) stays essentially the most dominant customary used world wide. Singapore is a pacesetter within the uptake with 100% of its N100 firms reporting in opposition to GRI requirements and 85 % reporting in opposition to Singapore inventory change tips.

Particularly, Singapore firms have scored higher than the worldwide common for materials matters recognized, reporting of carbon discount targets, the inclusion of environmental, social and governance (ESG) data of their annual experiences, acknowledging local weather change as a monetary threat to enterprise, and when it comes to governance when it got here to appointing a member of the board or management group to be liable for sustainability in addition to together with sustainability inside compensation.

Cherine Fok, Associate, KPMG ESG, KPMG in Singapore mentioned, “On this newest report, Singapore takes the lead for sustainability reporting globally. That is an encouraging indicator of progress and displays the nation’s willpower to persistently ship on earlier local weather commitments. Latest strikes by the regulators to additional refine and implement reporting necessities had been decisive, steering firms in direction of the adoption of finest observe disclosures backed by strategic enterprise planning and operational transformation. The rules had been complemented concurrently by widespread capability constructing efforts, and the introduction of a complete sequence of initiatives that prolonged assist to companies as they grapple with the challenges pose by the web zero transition. These initiatives embrace revisions to carbon tax charges to raised contemplate the gravity of the problem, new inexperienced insurance policies and incentives to drive commercially scalable options and know-how adoption that facilitated measurement, reporting and verification of sustainability disclosures. With the groundwork being laid, we are able to sit up for a deepening within the subsequent phases of sustainability reporting, with extra focus positioned on advanced features similar to local weather affect modelling, evaluation of the socio-economic impacts arising from local weather change, and a clearer hyperlink between sustainability efficiency and enterprise worth.”

Desk 1: Outcomes of sustainability key knowledge factors by N100 firms in Singapore versus world common

Legend:

For every knowledge level, the nation has been ranked and grouped into one in all 4 quartiles:

• High quartile (Excessive) = Nations ranked 1 – 15
• Center – excessive quartile (Medium/Excessive) = Nations ranked 16 – 30
• Low – center quartile (Medium/Low) = Nations ranked 31 – 44
• Backside quartile (Low) = Nations ranked 45 – 58

Local weather continues to dominate

The most recent findings reveal that companies are more and more recognising that they’ve a task to play in serving to to realize local weather targets, with a formidable 71 % of the N100 globally and 80 % of the G250 setting carbon discount targets. Reassuringly, most firms recognise that they need to scale back their very own emissions to realize their carbon targets slightly than rely solely on carbon credit. The variety of firms reporting in opposition to Activity Pressure on Local weather-related Monetary Disclosures (TCFD) steerage has practically doubled, main to raised local weather disclosure.

Nonetheless, the report additionally reveals some key areas the place quicker progress is required. Solely 64 % of G250 firms formally acknowledge that local weather change is a threat to their enterprise, and fewer than half of firms at present recognise biodiversity loss as a threat.

Sustainability reporting by the ESG lens

This yr’s report has additionally highlighted some additional challenges the world’s main firms are going through reporting on ESG. Among the many 1000’s of experiences analysed, lower than half of the world’s largest firms supplied reporting on ‘social’ elements (e.g. fashionable slavery; variety, inclusion and fairness; neighborhood engagement; and labor points), regardless of an rising consciousness of the hyperlink between the local weather disaster and social inequality. On the identical time, lower than half of firms disclosed their governance dangers (e.g., corruption bribery and anti-corruption, anti-competitive conduct or political contributions.) As well as, just one third of N100 firms have a devoted member of their management group liable for sustainability and fewer than one-quarter of those firms hyperlink sustainability to compensation amongst enterprise management.

ESG disclosures proceed to be overwhelmingly narrative-driven, slightly than publishing quantitative or monetary knowledge concerning impacts. That is clearly an space of enchancment for firms world wide.

On a constructive word, round three-quarters of reporting firms carried out materiality assessments and are disclosing materials matters.

John McCalla-Leacy, KPMG’s International Head of ESG, mentioned:

“Final yr, scientists from the IPCC warned the world was on ‘Code Pink’ for human pushed world warming. It was adopted by plenty of commitments from political leaders at COP26. As we head in direction of COP27, rapid motion is now wanted to avert human and environmental tragedies on an ever-increasing scale.

“KPMG’s 2022 Survey of Sustainability Reporting reveals regulation is making a distinction. My view is that it’s crucial to supply steerage and path to firms and assist drive cultural change. Enterprise leaders have accepted they’ve a duty and function to play in serving to to gradual and probably avert the unfolding disaster. What’s wanted greater than ever is globally constant requirements from governments and a collective effort from the world’s main firms to report on all features of ESG, recognizing the clear hyperlinks between the setting and wider social equality points.”

Jennifer Shulman, report co-author and International Lead for KPMG’s International ESG Advisory Hub, commented:

“The COP26 summit provided the world a human face to the unfolding local weather tragedy going through the planet. Representatives from a number of the world’s most distant and closely impacted nations and territories had been current to share their story. However, regardless of that rising recognition of the human facet of ESG, our newest survey continues to focus on an actual problem going through the C Suite – which is in how they reveal and mirror on their firm’s wider societal affect.

“We should always begin to see some progress over the approaching yr as organizations just like the Worldwide Sustainability Requirements Board (ISSB) roll out new world requirements for reporting. However, firms shouldn’t wait to be advised. Management from the highest is important. The worldwide pandemic and COP26 shone a lightweight on the rising inequalities in society. Many main organizations are responding with proactive motion that needs to be applauded. We’re seeing far better motion on gender equality, pay fairness and neighborhood affect assessments. It’s time for organizations to be clear of their reporting to focus on what they’ve achieved and maintain themselves to account on areas the place additional progress is required.”