Sustainability reporting is a type of organizational reporting on the company’s environmental and social performance. It is a way to internalize and improve an organization’s commitment to sustainable development in a way that can be demonstrated to both internal and external stakeholders.
A sustainability report is a means to an end. It serves to project environmental goals that the company aims to achieve in the long-term. Hence, when companies produce sustainability reports, they would be attributed responsibility to achieve these goals. This helps them to be more focused and committed to undertake sustainable measures, increasing a sense of efficacy in contributing towards the environment. Having need to demonstrate to stakeholders the company’s environmental standards, this would spur companies to put in their best efforts so as to upkeep a positive image and reputation of the company. Hence, sustainability reporting can be an effective way to encourage sustainable behaviors.
State of sustainability reporting in Singapore
The Singapore Compact, a national corporate social responsibility (CSR) society, found that only 14% – or 79 out of 562 – of Singapore Exchange (SGX) Mainboard-listed companies engaged in sustainability reporting in 2011. While this percentage appears low, it represents a 25-per-cent increase from 2010. Hence, this reflects that sustainability reporting is a relatively new trend among companies here in Singapore, which has taken off only in the past few years.
“Sustainability reporting is now more than a buzzword to business and accounting professionals. For the past year or so, the growing awareness of sustainability reporting has led to greater proactive interest from companies and organisations.” – Mr Thomas Thomas, Executive Director of the Singapore Compact for CSR.
Areas for improvement
The Association of Chartered Certified Accountants (ACCA) has highlighted that the benefits of reporting are not clearly understood within many companies, either by leadership or employees, and there is a confusion over the variety of frameworks to follow. These factors may have hindered the use of sustainability reporting.
Companies must be made to understand the the need and significance of sustainability reporting towards environmental sustainability, before they would be convinced to practise it. This can be done via dissemination of knowledge by the government or environmental agencies. Also, to boost companies’ sense of efficacy towards contributing to the environment, they can be encouraged to break down efforts into discrete smaller steps and given frequent positive feedback on their progress. Increasing sense of efficacy is important as it is a direct predictor of behavioral intention and intended behavior, based on the Theory of Planned Behavior.
