Press release

New Asia Pacific study reveals overall progress in sustainability reporting but critical gaps remain; PwC and NUS Business School

New Asia Pacific study reveals overall progress in sustainability reporting but critical gaps remain; PwC and NUS Business School
  • Press Release
  • 5 minute read
  • 07 Aug 2023

New Asia Pacific study reveals overall progress in sustainability reporting but critical gaps remain; PwC and NUS Business School

  • Overall rise in disclosure of identified climate-related risks and/or opportunities in companies’ sustainability reporting from 77% in 2021 to 88% in 2022.
  • Companies in most jurisdictions do well in having ESG targets (92%), but only 51% are disclosing net zero targets and only 42% have net zero targets based on the Science-Based Targets initiative (SBTi) framework. Only 16% reported having their targets verified by SBTi.
  • 80% of companies are disclosing their Scope 1 and 2 emissions; measurement of Scope 1 and 2 emissions is reaching maturity. Besides Japan, most companies across the region will need better completeness in their Scope 3 emissions measurement. 
  • Only 36% of companies reported their board of directors or management having sustainability training in 2022 (vs 24% in 2021).
  • Increase in companies obtaining external assurance from an independent party for their ESG disclosures, up from 37% in 2021 to 49% in 2022, although improvements can be made across the region with the exception of South Korea and Taiwan.

BANGKOK, 7 August 2023 – With investors and stakeholders increasingly coupling the value of a business with its ability to navigate climate risk and opportunities, companies across Asia Pacific are showing progress in their sustainability reporting around these areas according to Sustainability Counts II: Sustainability reporting in Asia Pacific, a study by PwC Singapore and the Centre for Governance and Sustainability (CGS) at the National University of Singapore (NUS) Business School. Analysing the sustainability reports of the top 50 listed companies by market capitalisation across 14 Asia Pacific jurisdictions[1], the study - launched at Ecosperity Week 2023 - further reveals that critical reporting and disclosure gaps remain for businesses to demonstrate that they have a viable and robust pathway to reach net zero by 2050 or mid century, and highlights the evolving challenges facing businesses ahead.

Professor Lawrence Loh, Director, Centre for Governance and Sustainability at NUS Business School, said, “The study highlights both the progress and gaps in corporate sustainability reporting across the Asia-Pacific region. While we are encouraged by the increased disclosure of climate-related risks and opportunities, it is crucial to remain vigilant about critical gaps such as net-zero targets, transparency in emissions reporting and sustainability training. As expectations for ESG rise, companies must prioritise resolving these gaps and make the necessary resource commitments. They can then serve as exemplary enterprises on a successful green journey, embodying accountability and resilience.”

Progress shown in climate-related risks and opportunities disclosure

The study found a rise in the disclosure of identified climate-related risks and/or opportunities in companies’ sustainability reporting, from 77% in 2021 to 88% in 2022. This goes hand-in-hand with their disclosure of processes for managing these risks and/or opportunities, up from 66% (2021) to 74% (2022), and how they integrated climate-related risks into their overall risk management, up from 36% in 2021 to 58% in 2022 for the 13 jurisdictions with the exception of South Korea. The climb in the disclosure rate can be attributed to the increased adoption of the Task Force on Climate-Related Financial Disclosures (TCFD) framework where the disclosure of integrating climate-related risks into overall risk management is one of the reporting components. At the same time, the findings suggest that compared to a year ago, companies are increasingly readjusting their business strategies and models to mitigate current climate issues and evolving stakeholder as well as regulator expectations.

Setting science-based net zero targets remains a challenge

Over nine in 10 companies studied (92%) disclosed sustainability targets in 2022. However, among them, only 51% have disclosed net zero targets. A lesser 42% reported that their net zero targets are based on the Science-Based Targets initiative (SBTi) framework with only 16% reported having their targets verified by SBTi, which is important for companies to demonstrate that they have in place a science-based pathway for their business to reach net zero. Considering that the majority of the Asia Pacific jurisdictions examined in this study have committed to achieving net zero between 2050 to 2070, the results suggest the need for greater alignment between companies’ climate goals and actions with their national sustainability agenda.

More effort required around Scope 3 emission measurement

The measurement of Scope 1 (direct emissions from a company) and Scope 2 (indirect emissions from electricity purchased and used) emission measurements are found to be reaching maturity with a significant 80% of companies studied having disclosed their Scope 1 and Scope 2 greenhouse gas (GHG) emission. However, a lesser 50% of companies studied disclosed their Scope 3 (indirect emissions from a company’s value chain) GHG emissions. Among companies that disclosed Scope 3 GHG emission, only 5% reported having carried out a comprehensive level of disclosure which is essential for understanding the fuller picture of a company’s carbon emission and effectively influencing change across their value chain.

Sustainability upskilling for board and management remains on the low side

36% of companies studied reported their board of directors or management have attended or received sustainability training in 2022, up from 24% in 2021. While there is progress made, the rate remains low and points to the need for sustainability upskilling at the leadership level for them to effectively carry out their roles in overseeing the company’s sustainability strategy, progress and governance.

The state of sustainability reporting assurance

With regards to providing stakeholders with credible information on the company’s sustainability performance to engender confidence in their business, the study saw an increase in companies obtaining external assurance from an independent party for their ESG disclosures, up from 37% in 2021 to 49% in 2022. Considering that three-quarters of investors polled in a recent Global Investor Survey by PwC indicated that their confidence in sustainability reporting would receive a bigger boost if it were assured at the same level as the company’s financial statement, businesses would do well to build a higher degree of credibility around their sustainability reporting through obtaining external assurance.

The road ahead for sustainability reporting

The report highlights top challenges facing businesses around sustainability reporting, and includes the developments of key sustainability reporting standards and frameworks that preparers of sustainability reports need to keep an eye on and navigate.

Fang Eu-Lin, Sustainability and Climate Change Leader, PwC Singapore, said:

“The challenges businesses face around the interoperability of key sustainability reporting standards, and across multiple jurisdictions, will require companies to develop a strategic roadmap and an operationalisation plan, while prioritising assurance in sustainability reporting to address rising expectations from investors and stakeholders.”

Chanchai Chaiprasit, CEO of PwC Thailand, added:

“There’s an increasing number of listed companies in Thailand that are putting in place sustainability reporting. Almost all of Thailand’s top 25 SET[2] companies have published sustainability reports, while SET50 and SET100 companies are aiming to publish reports due to the increasing awareness of the impact of climate change on the world, society and organisations. Despite this progress, only six companies in 2023 were certified by the SBTi and 27 companies had TCFD-compliant climate-related financial risk disclosures.”

“It’s a positive sign that more Thai-listed companies are showing an interest in sustainability reporting but the number of companies seeking external assurance by an independent third-party, such as an auditor or a consultant is still relatively low partly because sustainability reporting isn’t widely practised in Thailand. It should take at least five years from now to see listed companies widely auditing their sustainability reports,” Chanchai said.

Chanchai concluded that Thai business leaders must urgently recognise and understand the need for a carbon emissions reduction strategy, also known as a Net Zero Company, to mitigate environmental impacts. It’s particularly pressing for exporters to the EU, which adopted the Carbon Border Adjustment Mechanism (CBAM) as part of the European Green Deal to reduce greenhouse gas emissions by 55% in 2030. The CBAM will impact Thai exporters to the EU in the five main business sectors – electricity services, cement, fertiliser, iron, and steel and aluminium. Companies operating in these areas and exporting to the EU will need to accelerate their sustainability reporting to be ready for when the measures come into effect on 1 October 2023[3]. What’s more, countries in the Asia Pacific region are also seeking to issue climate change measures and policies to address sustainability challenges. 

//ENDS//


[1] Australia, China (mainland), Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, Vietnam
[2]  The Stock Exchange of Thailand (SET)
[3] Carbon Border Adjustment Mechanism, Taxation and Customs Union, European Commission

Notes to editors

  1. This study focuses on the top 50-listed companies by market capitalisation across 14 selected jurisdictions in Asia Pacific, namely: Australia, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, Vietnam. A total of 700 listed companies were studied, spanning 11 industries: communication services, consumer discretionary, consumer staples, energy, financials, healthcare, industrials, information technology, materials, real estate, and utilities. The companies are identified as those listed on stock exchanges worldwide, i.e., Australian Securities Exchange, Bombay Stock Exchange, Bursa Malaysia, Hanoi Stock Exchange, Ho Chi Minh Stock Exchange, Hong Kong Stock Exchange, Indonesia Stock Exchange, Korea Stock Exchange, New Zealand Stock Exchange, The Philippine Stock Exchange, Shanghai Stock Exchange, Shenzhen Stock Exchange, Singapore Exchange, Stock Exchange of Thailand, Taiwan Stock Exchange, Tokyo Stock Exchange. The information reviewed was based on the latest sustainability reports and annual reports available in January 2023. Only companies whose sustainability reports are communicated in English are included.
  2. The information reviewed was based on the latest sustainability reports and annual reports available in January 2023. Only companies whose sustainability reports are communicated in English are included.


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