PwC presents the third edition of Sustainability Counts, a report analysing sustainability reporting in Asia Pacific, conducted with the National University of Singapore’s Centre for Governance and Sustainability. The report reviews developments in global sustainability reporting standards and offers insights from the region over the past year.
Overview
Amidst the complexity and demands of sustainability reporting standards and frameworks, which are now becoming mandatory in various jurisdictions, it is crucial to re-centre on their fundamental purpose. These standards aim to benefit and impact different segments of society and the environment.
For instance, the International Sustainability Standards Board (ISSB) aims to empower capital market participants with the right information to support better economic and investment decision-making. Similarly, the European Union’s Corporate Sustainability Reporting Directive (CSRD) enables investors and stakeholders to access essential information to assess the impact of companies on people and the environment, and to evaluate financial risks and opportunities arising from climate change and other sustainability issues.
While there is increasing clarity, consolidation, and harmonisation in the global sustainability reporting landscape, navigating this complex terrain can still be challenging.
Despite challenges, there are encouraging benefits that extend beyond mere compliance. According to PwC’s Global CSRD Survey, respondents reported improvements in environmental performance, risk mitigation, corporate governance, access to capital, revenue growth, and cost savings.
As reporting requirements grow, organisations should not lose sight of the bigger picture. Sustainability reporting can not only help them be more transparent and accountable but also drive growth and value. By leveraging data-driven insights, organisations can make informed decisions that enhance operational efficiency, identify new opportunities, and foster long-term sustainability.
Key themes
Progress in sustainability reporting across Asia Pacific
Several jurisdictions in the Asia Pacific region, including Australia, Hong Kong SAR, Malaysia, Singapore, and Taiwan, have mandated climate-related disclosures. Other jurisdictions, such as Chinese Mainland, Indonesia, Japan, South Korea, and Thailand, are in the process of consultation or considering the adoption of ISSB standards. Some jurisdictions are advancing more rapidly in sustainability reporting requirements, leveraging existing frameworks like the Task Force on Climate-Related Financial Disclosures (TCFD) to meet the new standards.
We highlight the following key trends in sustainability reporting against the four pillars of the ISSB Standards that have emerged from our research. Generally, organisations are making progress in these areas, but there is still room for improvement, particularly in more challenging areas such as climate scenario analysis and Scope 3 greenhouse gas (GHG) emissions disclosures. Organisations should consider the work they have already done to meet new jurisdictional requirements and focus on closing any gaps.
Governance
There has been a consistent improvement in companies' disclosure of board of directors' responsibility for sustainability.
One of the key indications of how important sustainability is within an organisation is reflected in its compensation structures.
This trend signifies a growing recognition of the importance of aligning executive incentives with sustainability goals, thereby driving more committed and effective leadership.
Risk management
Across Asia Pacific, there is an increase in the disclosure level of the process to manage climate-related risks and opportunities.
This signals that risk management for sustainability is occurring separately and more needs to be done to further integrate it into the overall risk management process.
Strategy
Companies across Asia Pacific are setting more medium to long-term targets, indicating a strategic pivot towards prioritising medium-term and long-term objectives.
Disclosure of ESG targets under different timeframes
When it comes to assessing the organisation’s climate resilience, only
Out of this, most disclosed only qualitative climate scenario analysis. This indicates that developing and disclosing a quantitative scenario analysis presents several challenges such as the lack of accurate and thorough data on climate impacts, emissions, and financial metrics, which may be difficult to obtain.
Metrics and targets
Companies across Asia Pacific are reasonably well prepared in disclosing metrics and targets for climate-related risks and opportunities.
Disclosure of Scope 3 emissions
While Scope 1 and Scope 2 emissions provide insights into a company’s direct operations and energy use, Scope 3 emissions offer a deeper understanding of climate risks and opportunities beyond immediate control, such as supplier practices and product lifecycle impacts. Scope 3 emissions are critical because they often represent the largest share of an organisation's total GHG emissions.
Our research indicates a notable increase in the disclosure rate for Scope 1 and Scope 2 emissions, which has risen to 88% from 80% in the previous year. Although the disclosure rate for Scope 3 emissions remains lower, it has shown significant improvement, climbing to 63% from 50%.
Despite these advancements, there remains substantial room for greater transparency. Many companies have only reported on a selection of Scope 3 activities, often focusing on less complex areas such as business travel. However, the GHG Protocol identifies 15 categories of Scope 3 emissions, and a comprehensive assessment is crucial to avoid overlooking significant sources of emissions.
Sustainability assurance
Consistent and transparent sustainability reporting, aligned with corporate purpose and stakeholder needs, is essential. Such reporting enhances an organisation’s reputation and fosters trust and accountability.
PwC’s Global Investor Survey 2024 found that 44% of investors surveyed believe that, to a large or very large extent, corporate sustainability reports contain unsupported claims, often referred to as greenwashing. This perception drives investors to seek clarity and consistency from regulators and standard setters. Consequently, more jurisdictions are considering or mandating assurance over sustainability information, with plans to progress towards reasonable assurance.
As stakeholders increasingly demand reliable information, companies are responding by seeking both internal and external assurance for their sustainability reports. This trend aligns with our research, which shows a steady increase in companies pursuing assurance for their sustainability disclosures.
Throughout the report, we also explore additional critical areas such as Science Based Targets initiative (SBTi) verification, double materiality, quantitative climate scenarios, and nature and biodiversity. These insights are crucial for understanding the broader impact and opportunities within sustainability reporting. We invite you to read the full report and stay ahead in the journey towards sustainability.
Download the full publication: Sustainability Counts III
Download past editions
PwC would like to acknowledge The Centre for Governance and Sustainability (CGS) National University of Singapore (NUS) Business School and the following people for their contribution to this report.
Lead Author
Professor Lawrence Loh
Director, Centre for Governance and Sustainability (CGS)
NUS Business School
National University of Singapore
CGS Research Project Team
Huang Minjun
Research Associate
CGS, NUS Business School
National University of Singapore
Soon Wan Yi, Sabrina
Research Associate
CGS, NUS Business School
National University of Singapore
Joycelyn Lee
Research Analyst
CGS, NUS Business School
National University of Singapore
Verity Thoi
Business Development Lead
CGS, NUS Business School
National University of Singapore