Cority recently hosted an insightful webinar on the evolving landscape of sustainability reporting in APAC. Our experts, Jamie Devlin, VP of Sales, and Alex Hardwick, Director of Sustainability Enablement and Planning at Cority, shared their insights on the latest regulatory changes and how to tackle the practical challenges companies face. Here’s a rundown of what was covered during the webinar.
Global Trends in Sustainability Reporting
The landscape of sustainability reporting is rapidly transforming, with significant developments on both global and regional fronts:
1. Alignment with International Standards
Many regions are moving toward aligning their reporting frameworks with global standards, in particular those developed through the International Sustainability Standards Board (ISSB), which resulted in the IFRS S1 and S2 standards. This harmonization of standards has allowed regions to focus their efforts on alignment with these standards, rather than navigating a myriad of different global frameworks as was the case previously. For instance, India’s Securities and Exchange Board is now mandating sustainability disclosures in line with these frameworks. Similarly, China is set to require sustainability disclosures from major stock exchanges by 2026. Australia is also advancing with new sustainability reporting standards on the horizon.
2. Regional Taxonomies and Frameworks
The Association of Southeast Asian Nations (ASEAN) region has introduced regional taxonomies to pinpoint sustainable activities and combat greenwashing. This initiative spans multiple sectors, aiming to drive investment while addressing specific regional sustainability challenges.
3. Integration of Climate Data
Singapore is at the forefront of integrating financial and non-financial data, highlighting the importance of incorporating climate risk into both business and investment decisions.
4. Local Adaptation of Standards
Countries such as Sri Lanka and Republic of Korea are customizing international standards like IFRS S1 and S2 to fit their local contexts. This adaptation makes the standards more pertinent for businesses operating within these regions.
Key Challenges in Sustainability Reporting
As regulatory frameworks start to align and go beyond just reporting, we’re seeing them influence real business decisions. But at the same time, this creates challenges for companies trying to keep up. Some of the main hurdles businesses face are:
Understanding Reporting Requirements. Navigating the complex web of reporting standards and balancing regulatory obligations with industry expectations can be challenging.
Data Management. With frameworks becoming increasingly intricate, managing data from diverse sources poses a significant challenge. Ensuring data accuracy, integration, and auditability is crucial for effective reporting.
Setting and Tracking Targets. Establishing meaningful targets and accurately tracking progress is essential. Companies must align formal reporting requirements with internal success metrics.
Choosing the Right ESG Software Solution
As organizations handle increasing volumes of data, having the right expertise and technology is more crucial than ever. Here’s a breakdown of the essential elements organizations need to consider as they navigate their sustainability journeys.
ESG Expertise. It’s important to have the right subject matter experts in place, either within the organization or by bringing in external help. This is particularly critical for complex concepts like double materiality, as seen in Chinese regulations, which adopt a similar approach to the EU. If companies misinterpret this, they may focus on the wrong issues. For those aiming to reach a leadership position in sustainability, or accelerate their progress, external guidance may be necessary, especially when navigating voluntary frameworks or rating agencies.
Scalability: With the deluge of data that organizations are now required to handle, scalable solutions are essential. Many companies are struggling as they try to manage this data using outdated methods like spreadsheets and emails. The ability to manage large datasets and efficiently track progress is vital, especially for setting science-based targets.
Data Architecture and Collection. When selecting a software solution, the architecture must be able to handle vast volumes of data from multiple sources. This includes various data capture methods like spreadsheets and APIs. The solution must be robust enough to centralize this data while ensuring that it meets different reporting standards. Centralized data collection is often mentioned, but it’s crucial to have a system that can handle multiple data sources and integrate them effectively. Sustainability software should offer various data capture options, whether through uploads or API integrations, to streamline the process.
Accuracy and Maintenance. Accuracy is critical not only for GHG emissions calculations but also for keeping the content of regulatory frameworks up to date. Software plays a key role in automating manual processes and ensuring robust and auditable sustainability reporting.
How Cority Can Help
Cority provides comprehensive sustainability software and advisory services designed to help organizations navigate environmental regulations and avoid greenwashing. Our solutions offer tools for precise data collection, reporting, and third-party verification, enabling companies to transparently and genuinely demonstrate their environmental commitments. Whether you’re an experienced professional or just beginning your sustainability journey, we’re here to support you every step of the way. Discover how Cority can assist with your ESG reporting needs and drive meaningful sustainability efforts.
