Issues that can drive business risk include worker rights, gender and racial equality, child labour and environmental effects on people’s health. Companies should also support employee wellbeing and provide valuable training opportunities. This helps attract and retain talent and offers a range of flow-on benefits (e.g., better productivity and efficiency) for improved business outcomes.

In addition to mitigating ESG risk, Singaporean businesses can also build their resilience by being first movers in the ESG space and making use of new opportunities the market poses for companies.

“If a company does not understand the ESG landscape, they might miss all the opportunities available,” Tina says. “For example, some companies are introducing plant-based products to capture new clients. Or there may be opportunities for expansion, new technology or market streams.”

From a social perspective, a strong corporate governance framework is crucial for businesses as it empowers them to establish and enforce ethical standards, ensuring fair work conditions and promoting transparency across their supply chains to responsibly monitor and protect the rights of workers. This strategy benefits not only your business but society at large.

Sustainable practices can benefit Singaporean companies in various ways, depending on the nature of the business and its industry.

Some prominent practices include:

In today’s rapidly changing world, the benefits of sustainable practices and diversity and inclusion are more interconnected than ever before. Embracing a diverse workforce and fostering an inclusive environment presents a valuable opportunity for businesses to perform better and be more innovative.

“Without diversity, people think alike and have the same or similar views, so there’s little to no creativity,” Tina explains.

Diversity and Inclusion (D&I) is a positive social factor for employees, while it can be a governance strength for board members.

“The SGX emphasises that the boards have to be diverse – this is mainly to champion the idea that having the right mix of individuals with the right education, background and experience level is important for ensuring a business is well run,” Tina says.

Furthermore, embracing D&I helps to create an open workplace culture that is accepting of differences and more adaptable to change in an uncertain world.

ESG is now shaping business decisions to a significant degree. Whether a company is buying or investing in a business or improving parts of its own group, ESG considerations are now a standard part of commercial and financial due diligence processes.

Primary ESG considerations commonly include:

• climate change and its potential impacts on the business (e.g. the threat of natural disasters and drought);
• resource depletion and the limits it may place on resource consumption within a business’ operations;
• possibilities for emissions reduction and the conservation of resources (like water);
• the potential to adopt a circular business model that enables reuse and recycling to maximise resource efficiency and minimise waste; and
• the importance of good corporate governance, a hallmark of well-run companies that builds trust among consumers and investors while reducing compliance risk.

To ensure business decisions consider key ESG factors, leaders should develop a comprehensive ESG strategy and engage with stakeholders to promote open dialogue. “They also need to invest in sustainable business practices and monitor and report on their progress,” Tina says.

The assistance BoardRoom provides as part of our end-to-end ESG service includes (but is not limited to):

• undertaking a materiality assessment to identify which ESG issues your company should respond to and report on;
• conducting a gap analysis to evaluate compliance with stakeholder expectations;
• gathering valuable ESG data with our innovative, easy-to-use ESG Access platform; and
• setting data-driven key performance indicators and targets for ESG performance.

We provide full ESG life-cycle management for all types of businesses, from growing SMEs new to ESG to large multinational corporations wanting to take their sustainability practices to the next level.

Wherever you are on your ESG journey, we are ready to assist.

Our ESG professionals can also help you enhance your ESG performance in the eyes of key stakeholder groups through robust, efficient sustainability reporting.

Public and private companies alike should adhere to globally recognised frameworks to ensure their sustainability reports meet stakeholder expectations.

Publicly listed companies must now disclose their ESG management in line with the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. Many businesses also follow the Global Reporting Initiative Standards in their reporting.

With our guidance, you can confidently use the best ESG frameworks and methodology for your business.

According to Enterprise Singapore, ESG must be prioritised to attain investments, as investors are now looking to ‘green’ their portfolios.

“Investors want to know more about the risk profile of the companies they invest in,” explains Tina.

ESG reporting allows you to demonstrate the strategies your business is using to respond to the challenges and opportunities affecting its sustainability – and the scope is broader than sustainability alone. Investors want to see how businesses operate with integrity and good social responsibility in accordance with reporting frameworks. For example, local community giving initiatives and ethical decision-making all play a role in shaping a low-carbon future. As a result, investors can have greater confidence in your potential for long-term value creation.

In an effort to support a sustainable economy and bring companies in line with global baseline reporting standards, Singapore’s regulatory system is escalating its requirements for ESG reporting. Businesses are under mounting pressure to disclose specific data that relates to the climate risks and opportunities most material (relevant) to them.

“Regulators want companies to start pricing in the cost of externalities, including environmental pollution and biodiversity impacts,” says Tina.

The law already requires some public-listed companies to produce sustainability reports. However, all Singaporean companies – public or private – can use sustainability reporting as a tool to elevate their reputation and protect their operational longevity.

Any company can publish a statement about its commitment to ESG action. However, without hard data to back up its claims, it is unlikely to earn stakeholder trust.

Key methods to broadcast the outcomes of your sustainability efforts include:

By 2025, public-listed companies in some major industries will be required by law to disclose their ESG management in line with recommendations by the Task Force on Climate-Related Financial Disclosures (TCFD). Listed companies outside the nominated industries will also be required to comply unless they can reasonably explain why they have taken an alternative course of action.

To provide a starting point for this transition, the Singapore Exchange (SGX) has proposed a list of core ESG metrics companies can use for their reporting.

“The core metrics are quantitative and applicable to most listed companies across various industries,” says Tina.

Examples of these metrics include:

Whether you are a publicly listed or private company, to ensure your sustainability report carries weight in an increasingly global marketplace, we recommend adhering to globally recognised frameworks such as:

• TCFD recommendations – prescribed by the SGX for climate reporting;
• Global Reporting Initiative (GRI) Standards – the world’s most widely used sustainability reporting standards;
• SASB Standards – often combined with GRI standards to appeal to various audiences; and
• UN Principles for Responsible Investment – actions for incorporating ESG issues into investment practice.

As a publicly listed company, you must follow SGX guidelines first and foremost; however, some industries require more robust additional reporting. For privately listed companies that don’t need to follow the standards set by SGX, you may choose based on your industry, what your competitors are using, or emerging regulations.

Impactful ESG action starts with understanding what matters to your business and your stakeholders, and where you can make the most difference. The need for familiarity with these factors makes conducting a materiality assessment critical.

“A materiality assessment allows businesses to identify the key ESG metrics and factors relevant to them and present a risk or opportunity for the businesses,” explains Tina.

“From there, they can decide what the next steps should be in terms of how they want to respond.”

According to Tina, companies often need clarification on which ESG data to include in their reports.

“ESG reporting encompasses a big list of factors,” she says. “Depending on which framework you look at, there could be as many as a hundred topics you can disclose against.”

The best framework for you will come down to various factors, such as your listing status, stakeholder expectations, size, industry, and geographical presence. After selecting your framework, conducting a materiality assessment will help identify which disclosure topics are most important for your business. Many Singaporean and multinational businesses engage with expert ESG reporting services for guidance on this matter.

Manual tracking of sustainability efforts can be time-consuming and expensive, and the resulting data often lacks accuracy, consistency and depth.

“ESG data – especially on environmental risks and impacts – can be very difficult to collect because it may fall outside the company’s immediate control,” Tina says. “It may also sit with different people, which makes collecting and combining the data in one place a slow, arduous task.”

For many businesses, the solution lies in modernising the data collection process.

“Technology can automate some of the processes around data management and also help streamline the process,” Tina adds.

The best way to ensure that your sustainability reporting bolsters your reputation is by demonstrating how your ESG efforts create real change for local communities, whether your business is based in Singapore or elsewhere in the world.

“Focus on communicating the positive impact you are having within your sphere of control,” Tina says. “This will eventually help to improve your reputation, brand image and consumer engagement.”

For powerful reporting, you can also: