ASEAN companies get serious about climate change

Published date: 19 July 2022

Six-country study finds most businesses report on climate – but more to do to ensure consistent disclosure

Landmark research from Global Reporting Initiative (GRI) and the National University of Singapore (NUS) Business School has, for the first time, shed light on how companies in the ASEAN region are addressing their obligations for climate-related reporting.

Analysis of the top 100 largest listed companies in six Southeast Asian nations – Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam – finds 70% (420 companies) published climate-related disclosures in 2020/2021. Climate Reporting in ASEAN: State of Corporate Practices analyzes those 420 businesses, focusing on their approach to reporting, materiality, risks and opportunities, governance, strategy, targets, and performance.

Key findings of the research include:

  • Most of the companies (84%) report their material topics on climate change, yet only one quarter (26%) describe long-term factors related to their climate risk strategy;
  • 62% of companies disclose their greenhouse gas emissions (ranging from 5% in Vietnam to 80% in the Philippines);
  • A majority of businesses (56%) identify climate-related opportunities, compared with less than half (47%) sharing plans on risk mitigation;
  • Three-in-four companies (74%) disclose metrics on climate-related performance, however, 46% do not share how targets are discussed;
  • Two-third (68%) assign climate responsibilities to a sub-committee, while 8% link management remuneration to climate

In terms of climate reporting:

  • A significant majority of sampled companies (85%) use the GRI Standards, ranging from Singapore (99%) to Vietnam (65%);
  • In the six markets, reporting using other frameworks is low: 19% use TCFD, 16% apply IIRC, and 14% use SASB;
  • At 76%, reporting on the Sustainable Development Goals is widespread by the companies in all six countries, with those from Thailand (95%) and Indonesia (93%) leading the way.

Given Southeast Asia is highly vulnerable to the harshest effects of climate change, more action is needed to ensure countries and companies have effective strategies in place to mitigate the impacts, including carbon reduction plans. It is encouraging, therefore, that our research with NUS finds many large businesses in the region are reporting on climate – although more progress is needed. With 85% of the companies relying on the GRI Standards for their climate disclosure, it demonstrates the importance of robust and globally-applicable reporting frameworks. Going forward, we will deepen our engagement with ASEAN businesses and stakeholders, to achieve greater consistency in climate reporting that is embedded in accountability for impacts.”

Dr. Allinnettes Adigue, Head of GRI in the ASEAN region

Effective climate reporting is a critical component in the global effort to combat climate change. Achieving greater consistency in climate reporting gives confidence to investors and helps businesses embrace sustainability in their operations. We see this as a tremendous opportunity for large companies in ASEAN, and a worthy goal that we can all work towards.”

Professor Lawrence Loh, Director, Centre for Governance and Sustainability, NUS Business School

The study was based on the top 100 companies by market capitalisation, as listed on the Indonesia Stock Exchange, Bursa Malaysia Securities Berhad, Philippine Stock Exchange, Singapore Exchange, Stock Exchange of Thailand, and Ho Chi Minh City Stock Exchange. Of the total 600 top companies, we found that only 420 companies have published sustainability reports with disclosures relating to climate. This comprised of 55 companies in Indonesia, 98 companies in Malaysia, 66 companies in the Philippines, 98 companies in Singapore, 63 companies in Thailand, and 40 companies in Vietnam.

The research evaluated the completeness of the companies’ climate disclosures, drawing on the GRI Standards, the Task Force on Climate-Related Financial Disclosures (TCFD), the Greenhouse Gas (GHG) Protocol, the Science Based Target initiative (SBTi), the Carbon Disclosure Project (CDP), and the UN Sustainable Development Goals (SDGs).

GRI thanks the Switzerland's State Secretariat for Economic Affairs (SECO) and Australia’s Department of Foreign Affairs and Trade (DFAT) for providing funding support for this project.  

The ISEAS Southeast Asia Climate Outlook 2021 Report concluded that ASEAN was the global region most vulnerable to the impacts of climate change.

The Centre for Governance and Sustainability (CGS), formerly known as Centre for Governance, Organisations and Institutions (CGIO), was established by the National University of Singapore (NUS) Business School in 2010. It aims to spearhead relevant and high-impact research on governance and sustainability issues that are pertinent to Asia, including corporate governance, corporate sustainability, governance of family firms, state-linked companies, business groups, and institutions.

NUS Business School is known for providing management thought leadership from an Asian perspective, enabling its students and corporate partners to leverage global knowledge and Asian insights. The School is one of the 16 colleges, faculties and schools at NUS. A leading global university centred in Asia, NUS is Singapore’s flagship university which offers a global approach to education, research and entrepreneurship, with a focus on Asian perspectives and expertise.