ESG Remains Crucial To Building A Sustainable Future

HSBC Global Private Banking has strategies in place to help investors capitalise on the sustainability revolution.

Southeast Asia’s vulnerability to global warming and environmental risks has been a major cause for concern among policymakers and investors alike. The region’s rapidly growing population, expanding economies and increasing urbanisation have led to an upsurge in greenhouse gas emissions, deforestation and plastic pollution.

To tackle these challenges, the Association of Southeast Asian Nations (ASEAN) has set an ambitious renewable energy target of 23% by 2025, a goal that requires significant investment in green technologies and innovation. Already, there are growing signs that investors in the region understand the importance of the net zero transition. Similarly, HSBC Global Private Banking (GPB) is witnessing rising demand for ESG investment solutions from high net worth (HNW) and ultra-high net worth individuals and their families in this region.

As the world transitions to a low-carbon economy, HNW investors in the region should be ready to capitalise on opportunities presented by this global shift. Indeed, climate change will affect companies across all sectors as stakeholders pressure them to become net zero. Against this backdrop, companies that are investing in green technologies, transitioning to cleaner energy and reducing their carbon footprint will be well-placed for long-term success.

“Southeast Asia’s vulnerability to global warming and environmental risks necessitates a green transformation and a shift towards renewable energy. Investors can position themselves to capture opportunities that emerge,” says Jeffrey Yap, Head of Investments and Wealth Solutions, Southeast Asia, HSBC Global Private Banking and Wealth.

One area gaining attention from investors involves solutions to tackle the plastic waste problem, as plastic pollution continues to be a major environmental issue. “Many people see plastic as waste, but it’s also a resource that can be recycled. So, the opportunity is to keep plastic in the circular economy, where we are able to extract the most value from this resource and minimise the amount of the waste coming from it,” Yap says.

He notes that Singapore, a global financial hub in the region, is well positioned to lead the commercialisation of green technologies given its government’s bold and concrete policies and actions for the country to become a climate-friendly nation. In particular, the city-state can play a role as a “living laboratory” to evaluate, pilot and commercialise innovative solutions for Southeast Asian markets. Singapore can also act as an R&D hub for clean technology, as it has identified the clean energy industry as a strategic growth area.

HSBC, one of the world’s largest banking and financial services organisations, has committed to achieving net zero in its financed emissions by 2050 and has developed a three-part strategy to realise its sustainability ambitions. First, the bank is financing green technology opportunities and transition, investing in companies that are developing renewable energy and energy efficiency solutions.

Second, it is investing globally with an Environmental, Social and Governance (ESG) lens, prioritising investments that align with the bank’s sustainability goals. Third, the bank is supporting customers and the community to go green by providing them with sustainable finance solutions and advice on how to reduce their carbon footprint.

Building Sustainable Investments

ESG factors have been found to be positively correlated with financial performance and attractiveness to investors, according to research by EY-Parthenon. In particular, metrics such as operating margins or return on invested capital are likely to benefit from a focus on sustainability.

To capitalise on this trend, HSBC GPB offers investors three main ways to embed sustainability into an investment portfolio: ESG enhanced, thematic and impact investing. ESG enhanced investments refer to investing in companies that score well on ESG criteria, while thematic investments focus on specific sustainability themes such as renewable energy, water conservation or circular economy.

One investment theme of note that HSBC GPB offers involves investing in companies and projects that prioritise nature-positive outcomes, such as its global biodiversity discretionary mandate. The bank believes that solutions designed to protect and regenerate biodiversity have an important role to play in the transition to net zero.

Impact investing, on the other hand, aims to generate an intentional, direct and positive social or environmental impact alongside financial returns. “We have found that impact investing is gaining traction for our clients. The pandemic and natural disasters in recent years prompted many investors to look for impact investing opportunities that can help the world move towards a more sustainable future,” Yap says.

A Partner on Your Green Journey

HSBC GPB is well positioned to help its private banking clients capitalise on the region’s green transition by leveraging its global network and universal banking model. The bank partners with best-in-class third-party product providers as well as HSBC Asset Management to develop proprietary investment solutions that contribute to sustainable development across the region, such as those focused on renewable energy, sustainable food and healthcare to support its clients.

Yap says: “HSBC GPB’s commitment to net zero and its sustainable finance solutions offer investors a way to build a sustainable portfolio and capitalise on the region’s green transition. By adopting an ESG approach to investment and finance, investors can play a crucial role in driving the transition to a low carbon economy, while also generating long-term financial returns.”

The world’s second largest vegetable oil processor recently entered the sustainable aviation fuel market, signaling its commitment to advancing net zero goals.

Palm oil is present in a diverse range of everyday products, ranging from food and personal care to thousands of household items. It is estimated that palm oil is used in more than 50% of packaged supermarket products globally. However, in line with the global sustainability momentum, the palm oil industry is also having to tackle some key questions. How can palm oil companies operate more sustainably? And can the industry effectively mitigate its impacts on the environment?

One company that is addressing these questions head on by continuously enhancing its sustainability commitments is Apical. Part of the Singapore-headquartered RGE group of companies, Apical is the world’s second largest vegetable oil processor with a customer base in over 60 countries.

Its key business segments include bulk oils, functional and specialty fats, oleochemicals and renewable fuels. With integrated assets in strategic locations across Indonesia, China and Spain, Apical operates numerous refineries, oleochemical plants, renewable fuel plants and kernel crushing plants. Through joint ventures and strategic partnerships, Apical also has processing and distribution operations in Brazil, India, Pakistan, the Philippines, the Middle East, Africa, the USA and Vietnam.

Growth Based on Sustainability Foundations

Core to Apical’s sustainability pledge is its strict no deforestation, no peat and no exploitation (NDPE) commitments across its operations and supply chain. The company has invested heavily in traceability in order to assure stakeholders that the palm it refines is produced in line with the required sustainability standards. As of December 2022, 99.98% of the palm oil refined by the company can be traced back to its plantation of origin.

This progress has been acknowledged by the wider industry. Last year, Apical was rated as one of the top three most transparent palm oil companies globally in the Sustainable Palm Oil Transparency Toolkit assessment. Apical’s refineries in Indonesia have had Roundtable on Sustainable Palm Oil (RSPO) supply chain certification since 2012; the company also adheres to International Sustainability and Carbon Certification principles.

Pratheepan Karunagaran, Executive Director of Apical, says: “The reality is that palm oil is an incredibly efficient vegetable oil crop compared to alternative vegetable oils. Palm oil takes up about 6% of agricultural land used for vegetable oil but accounts for around one third of the global production of vegetable oil. This is one of the reasons that palm oil can actually help address food security issues around the world.

“But we also understand that palm oil needs to be produced with the necessary certifications and in line with global best practices in sustainability. As a large midstream and downstream processor, we believe we are well placed to act as a positive influencer in the palm oil supply chain. Ultimately, our growth has been based on foundations of sustainability and transparency, and these principles will remain in place even as we continue to diversify our operations.”

Apical has also rolled out specific initiatives aimed at communities and smallholders. “Even though they produce about 45% of Indonesia’s total palm oil production, smallholders do not have the resources to access sustainable palm oil certification schemes. Our focus is on helping smallholder farmers to get the required certifications, which will boost their incomes and also support our continued drive to improve traceability throughout our supply chain,” says Karunagaran.

The Smallholder Inclusion for Better Livelihood & Empowerment (SMILE) program, a joint effort between Apical, Asian Agri and Kao Corporation launched in 2020, is enhancing the resilience of smallholders by addressing the barriers affecting their yield productivity. In January this year, the Sustainable Living Village program was rolled out in partnership with international NGO IDH as a multi-stakeholder initiative to alleviate poverty and develop communities through targeted initiatives aimed at specific community needs.

2030 Targets

Last year, the company took a major step forward with the launch of Apical2030, a sustainability roadmap comprising 10 time-bound targets and commitments across four strategic pillars— Transformative Partnerships, Climate Action, Green Innovation and Inclusive Progress.

Among its commitments are to collaborate with suppliers to achieve a 100% NDPE compliant supply chain by 2025; engage 100% of its suppliers for independent verification of traceability by 2025; partner with suppliers to protect and/or conserve 150,000 hectares of forest and peatland areas by 2030; and work with suppliers to promote clean energy through 20 biogas plants.

Apical has also committed to achieving net zero across its operations by 2050 and to reducing greenhouse gas emissions intensity by 50% in its production against a 2020 baseline by 2030. In addition, the company plans to help 5,000 independent smallholders achieve certification by 2030. Apical has made tangible progress with these targets since the launch of Apical2030.

Diversification and Transformation

But in an industry as fast moving as palm oil, diversification and the ability to respond to market opportunities are key, while also meeting sustainability and environmental commitments.

Apical is already committed to the continued expansion of its downstream processing capabilities and has embarked on a journey to become a leading second-generation biofuel feedstock provider through the collection of waste and residue from mill and palm oil refineries, along with used cooking oil, to act as an alternative to other forms of feedstock.

Examples of waste and residue from industrial processes that can be used for feedstock include mill effluent, empty fruit bunches, tank bottom oil and spent bleaching earth oil. Used cooking oil (UCO), obtained from food processing companies, restaurants, catering companies and households, can be passed through a chemical process to convert it to biofuels.

Recently, Apical partnered with Tanoto Foundation and philanthropic organization T.Care to create UCO collection points in neighborhoods in Jakarta, Indonesia. The UCO is sold to Apical, creating a sustainable income for communities and helping fund the construction of early childhood development centers in the area.

So why is this important? “The collection of UCO, waste and residues, and converting these into biofuels is a great example of circularity in action, as we take waste from our processes and use it for our other production processes. It supports our 2030 targets, particularly those in our Green Innovation pillar, and it’s good for communities. But it’s also helping us diversify our operations into other downstream areas,” says Karunagaran.

A New Venture Takes Flight

One such area is sustainable aviation fuel (SAF), a biofuel used to power aircraft that has similar properties to standard, fossil-based jet fuel but with less CO2 emissions. In April, Apical, through its renewable energy subsidiary Bio-Oils, moved into the SAF space with the establishment of a landmark joint venture with Spanish energy company Cepsa to produce second-generation sustainable aviation fuels by constructing the largest production plant in southern Europe.

The joint venture will involve a total investment of up to 1 billion euros (US$1.1 billion), with the new plant scheduled to begin operation in 2026. The plant will produce up to 500,000 tons of SAF and/or renewable diesel annually.

“The key global challenge for the production of SAF is access to feedstock, or renewable waste and residue raw materials. This joint venture is a natural evolution of our business, in that we are now commercially using at scale the waste generated by our operations, and using this as viable feedstock for the production of SAF and other biofuels like hydrotreated vegetable oil,” says Karunagaran.

Looking forward, demand for palm oil looks set to continue to grow, driven by increasing populations and resulting demand from the food, beverage, personal care and biofuels industries, among others. This underlines the need for the implementation of transparent, independently monitored sustainability commitments across the sector and its supply chains, says Karunagaran.

“It also highlights the need for effective collaboration among all parties, including customers, other palm oil companies, independent smallholder farmers and NGOs, as well as partners old and new, to build more sustainable supply chains and to drive lasting, sustainable change in the palm oil sector,” he says.

www.apicalgroup.com

For more than half a century, Sino Group has been championing green living and wellness, pursuing meaningful designs and innovations while respecting heritage and culture to build a better community.

Incorporated in Hong Kong in 1971, Sino Group has been growing with the community into one of the leading developers of the city. Today, the Group has footprint in Hong Kong, mainland China, Singapore and Australia as well as a team that counts over 11,000 across the Asia-Pacific.

The Group has participated in over 250 projects spanning more than 130 million square feet of floor area. Its core business of developing proper ties for sale and investment is complemented by a full range of property services, hotel investment and management to ensure a holistic “Sino Experience.”

Sino Group integrates sustainability into all aspects of its operations—from architectural planning, eco-friendly provisions, green property management and innovations to taking care of its staff, serving the community and preserving cultural heritage.

“Creating Better Lifescapes” is the ethos guiding its delivery of excellence, brought to life through work across three interconnected pillars comprising Green Living, Innovative Design and Community Spirit.

Green Living

In 2020, the Group unveiled its Sustainability Vision 2030, a blueprint charting its sustainability course toward 2030 and beyond. It entails the Group’s vision across crucial areas such as decarbonization, renewable energy, plastic reduction, green building certification and innovative solutions, all of which contribute to a more sustainable future.

Sino Land, one of the listed companies of Sino Group, signed up to support the United Nations’ Business Ambition for 1.5°C in May 2021 as well as the Task Force on Climate-related Financial Disclosures (TCFD) in 2021, becoming one of the first Asian real estate developers to commit to the global calls-to-action to build a more sustainable future together.

Stepping up its efforts on sustainability, in June 2022, the Group unveiled its Decarbonization Blueprint, a holistic roadmap toward net zero by 2050. A climate risk assessment tool has been developed to improve climate resilience of the Group’s properties in alignment with TCFD recommendations. As of June 30, 2022, the Group recorded a reduction of greenhouse gas (GHG) emissions and electricity consumption by 39.68% from the 2012 baseline, exceeding its initial target. The Group is adopting a refined approach—in line with the Science Based Targets initiative methodology—to reduce Scopes 1 and 2 GHG emissions per square meter by 53.1% from its 2018 baseline and to incorporate Scope 3 GHG emissions into this target.

Innovative Design

Sino Group has been exploring innovative solutions to build a more sustainable community. It established Sino Inno Lab in 2018 to provide a sandbox platform for startups and technology companies and to facilitate co-creation. It seeks to nurture solutions that can be applied to properties to enhance services and customers ’ experiences.

The Group’s partnership with EcoBricks, a home-grown startup, is a stellar example. With its proprietary formula and process, EcoBricks is able to upcycle all the seven types of plastic, including mixed and composite plastic, into “green concrete” for construction. The low-energy process entails no heating or melting of plastic, eliminating harmful emissions and representing a viable circular economy solution to plastic waste. The Group has applied EcoBricks to Gold Coast Piazza, Olympian City and The Fullerton Ocean Park Hotel Hong Kong and plans to use them at more suitable properties. It also aims to encourage tenants and customers to support plastic upcycling and the circular economy.

Sino Group is also taking a major step in driving green and digitalized property development. It is deploying Ampd Enertainer, an advanced energy storage system, to power construction activities on-site. Compared with traditional generators, it is quieter, reduces carbon emission by 75% and eliminates “tailpipe” emissions. In addition, OpenSpace’s AI 360, an integrated solution for efficient project management, is being deployed on construction sites. The 360-degree cameras and AI-based technology facilitate complete visual records on-site and enable remote project tracking.

Community Spirit

Buildings give the community character, history and a sense of connection, enriching our environment and telling our stories. Through heritage conservation, such as The Fullerton Hotels in Singapore and Sydney, together with arts and cultural projects, the Group helps to rejuvenate facilities. It also places a high priority on volunteer services and community engagement in collaboration with like-minded partners.

Reflecting on the Group’s journey, Daryl Ng, Deputy Chairman, says, “Businesses can play a key role in creating a more sustainable future. I would like to sincerely thank our partners for the wonderful support for the important causes. We look forward to forging more partnerships to build a better community together.”

www.sino.com

The Malaysian food and agriculture company is committed to responsible labor management, reducing carbon emissions and protecting biodiversity to ensure food security and a sustainable future.

As our planet struggles under the weight of climate change and environmental degradation, responsible companies across the globe are doubling down on efforts to reduce their carbon footprint, recognizing the urgent need for immediate action.

One such company is FGV Holdings Berhad (FGV), a global and diversified agribusiness focused primarily on three sectors: plantation, sugar and logistics. Based in Malaysia, it is one of the world’s largest producers of crude palm oil, contributing up to 15% of the commodity to the country’s total annual output.

Listed on the main market of Bursa Malaysia, FGV has 50 years of industry expertise and operations in nine countries across Asia, the Middle East, North America and Europe. The company is supported by a strong workforce of more than 45,000 people and is committed to delivering sustainable food and agriproducts to the world while tapping into new revenue streams from the circular economy.

Commitment to Sustainability

To further position itself as a leader in sustainable agriculture, the company has made a bold commitment to no deforestation, no development on peatland and no exploitation (NDPE), as well as to contribute to the Sustainable Development Goals (SDGs). FGV has a dedicated sustainability program that addresses Environmental, Social and Governance (ESG) issues and has received several certifications for its sustainable practices, including the Malaysian Sustainable Palm Oil (MSPO) Certification Scheme and the Roundtable on Sustainable Palm Oil certification.

“Championing sustainable practices and promoting transparency is crucial for companies in the agriculture sector due to the nature of our business in utilizing land for crops. Under the ESG framework, such companies face greater scrutiny, which is why we at FGV work tirelessly to exceed expectations and set industry standards,” says Dato’ Nazrul Mansor, Group Chief Executive Officer (GCEO) of FGV Holdings Berhad.

“We acknowledge the potential adverse environmental and social impacts linked to any business activities, including deforestation, carbon emissions and labor issues. Therefore, we are collaborating with stakeholders to promote sustainable forest management and develop sustainable production systems that contribute to poverty reduction and economic development, while protecting the environment and conserving biodiversity,” says Nazrul.

Climate Action

FGV has become the first food and agriculture company in Malaysia to affirm its commitment to addressing climate change by signing the Science Based Target initiative’s Business Ambition for 1.5°C pledge. Through its Climate Action Plan, the company is taking tangible steps toward becoming a net zero emission business by 2050.

To reduce energy consumption, FGV employs various energy-saving practices across its operations. These practices include using self-generated biogas, LED lights and digital tools such as the eDO mobile app and Smart Fuel card to reduce fuel consumption and carbon emissions. The company also invests in Euro 5 emission compliant trucks for its logistics sector and recommends retiring fleet vehicles after 10 years.

Various zero-waste initiatives and responsible waste management practices are employed by FGV, including the usage of empty fruit bunches as mulch and the use of fortified organic fertilizers to reduce cost and carbon emissions. Initiatives to improve energy efficiency are also undertaken by FGV’s subsidiaries and business sectors, such as the installation of solar photovoltaic systems. FGV generates clean energy for internal consumption and sale to the grid, with some mills relying on renewable energy as their primary power source. The company recently commissioned a biogas power plant and is exploring alternative sources of energy, such as converting biomass from palm oil production into renewable energy.

Biodiversity and Wildlife Protection

FGV prioritizes the protection of biodiversity and wildlife, and has put in place several programs on the conservation of certain endangered, rare and threatened species, namely the Malayan sun bears, pygmy elephants, gibbons and pangolins. FGV also aims to protect prime forest areas by planting 50,000 indigenous trees and wild fruit trees in its plantations.

Digitalization and Technology

Through its research and development arm, FGV provides innovations and technologies to improve efficiency and productivity, focusing on estate and mill modernization, high quality planting materials, crop diversification and sustainable initiatives such as using renewable energy and slow-release fertilizers. The company has formed partnerships with educational institutions to upskill and reskill employees and plans to incorporate advanced technologies and sustainable processes to address labor shortages.

Traceability and Transparency

Traceability and transparency are essential components of FGV’s sustainable value chain. The company has implemented a robust traceability system, enabling the identification of potential risks and prompt resolution through continuous improvements. By adopting traceability and responsible sourcing practices, the company can fulfill its obligations to environmental protection and human rights.

Moreover, FGV has launched the Independent Smallholders Consultation Program in support of government directives for all smallholders to comply with the MSPO Certification Scheme. About 70% of FGV’s fresh fruit bunches supply are from smallholders. As of 2022, FGV has managed to achieve 100% traceability to mills and 99% traceability to palm oil plantations.

Human Rights

FGV respects human rights and is committed to complying with international human rights standards. The company has implemented various programs to strengthen its labor practices, including aligning its policies and recruitment practices to international labor standards. Its workers’ rights to freedom of movement, freedom of association and collective bargaining, and decent wage are embedded in FGV’s Group Sustainability Policy. To improve living conditions, from 2018 to 2022, FGV spent 412 million ringgit (US$92.61 million) on the construction of new accommodation facilities, repair works on housing facilities as well as equipment upgrade.

One of the main standards adopted by FGV is the no recruitment fees policy for the hiring of migrant workers. FGV has taken several measures, including setting aside 112 million ringgit (US$25.17 million) to reimburse recruitment fees to current and former FGV migrant workers.

The company is also a participant in the National Pledge Against Child Labor campaign in Malaysia and is committed to preventing and addressing child labor issues.

As part of its commitment to diversity, equity and inclusion, FGV became a signatory of the Women’s Empowerment Principles in April 2022. It is a set of guidelines developed by the UN Global Compact and UN Women to guide businesses on how to advance gender equality and women’s empowerment in the workplace, marketplace and community. FGV also established a Gender Equality and Women’s Empowerment Committee in 2021 to reinforce its commitment to gender equality. The company further introduced the Women in Leadership program to nurture female employees for leadership positions.

In addition to its support for human rights, FGV invests in various corporate social responsibility initiatives to assist communities in need. Last year, the company contributed to the National Disaster Assistance Fund and supported vocational courses at colleges. FGV’s contributions to society are crucial for community empowerment, reflecting the company’s values and commitment to making a positive impact on the world.

These actions position FGV as a leader in sustainable business practices, setting an example for the industry and demonstrating that a commitment to sustainability is not only vital for the environment, but also for long-term business success.

www.fgvholdings.com

Investors feel strongly that they are not getting the data-driven insights they require to evaluate a company’s growth and risk profile, according to EY’s latest survey.

By Terence Jeyaretnam, EY Asia-Pacific Leader and Partner, Climate Change and Sustainability Services

The Asia-Pacific findings in the latest EY Global Corporate Reporting and Institutional Investor Survey show a significant gap between what companies are reporting in their Environmental, Social and Governance (ESG) disclosures and what investors expect. Investors feel strongly that they are not getting the data driven insights they require to evaluate a company’s growth and risk profile. It is an information gap that threatens to stifle access to capital for many organizations and ultimately, could hinder progress on decarbonization.

This year, the report combined research from both finance leaders and investors, drawing together data from two surveys to give a fresh perspective on corporate reporting and sustainability from both the issuers and users of disclosure. It reveals that investors are critical of the way Asia-Pacific businesses are disclosing information about their sustainability activities. In particular, they frown on the practice of “cherry picking” what companies choose to make public. Reflecting on the information they see companies in the region provide, three-quarters (75%) of investors believe that Asia-Pacific organizations are “highly selective” about the information they provide.

A massive 91% of investors believe that unless there is a regulatory requirement to do so, most companies will provide only limited decision-useful ESG disclosures. In particular, where businesses do make long-term investments in sustainability, 80% of investors say that they often fail to explain their rationale, making such investments hard to evaluate and raising concerns about greenwashing.

Instead, what investors want and need to see is how ESG strategies are actually bringing about positive change.

Increasing Scrutiny from Investors Who Want to See More ESG Action

The 53% of Asia-Pacific executives who think investors are putting even more scrutiny on their performance against ESG goals are absolutely right. Asked about their level of scrutiny, 73% of investors said they are evaluating nonfinancial disclosures in a “structured and methodical” manner. Only 2% said they conduct little or no review.

When it comes to ESG, investors believe organizations should be playing the long game. According to the survey, almost three-quarters of the region’s investors (74%) say companies should invest in improvements relating to ESG matters—even if it dents their short-term profits. But only 58% of Asia-Pacific business leaders hold the same view.

The survey does highlight some common ground between businesses and their investors.

Interestingly, many businesses do seem to recognize that there is room for them to improve their approach to reporting. Just over half (54%) of the organizations surveyed said they provide investors with relevant information on sustainability activity, leaving a significant percentage who recognize that they do not. Two-fifths (41%) of finance leaders interviewed also admitted their current ESG reporting would not stand up to the scrutiny of basic assurance standards.

Ultimately, both sides agree on the weaknesses of current reporting standards, noting that issues include the following: lack of requirements for supporting evidence, separation of ESG reporting from mainstream financial reporting and lack of forward-looking disclosure.

Companies Need to Take Immediate Action to Close the Trust Gap

To better meet investors’ expectations, EY research shows that Asia-Pacific companies need to take the key actions below.

1. Build a better understanding of investors’ sustainability expectations, and how disclosures can address material ESG issues and earn stakeholder trust.

• Focus—Investors are working to align their portfolios to net zero. Companies should respond with robust insights into the important opportunities and risks, including transition risk, physical climate risk and climate scenario analysis – as well as the bottom- and top-line potential of a company’s climate investments. Organizations should focus their efforts on prioritizing materiality, benchmarking disclosures against peers and preparing for the new International Sustainability Standards Board (ISSB) standards.
• Accountability—Companies should meet investor requirements for robust governance and board oversight around sustainability. That might mean moving from ESG pledges to progress and results. Or it might mean a clearer focus on ESG stewardship. Investors also expect continual engagement with company leaders around the organization’s material progress against sustainability goals. Boards and executive teams will therefore require meaningful and credible sustainability data and insights to demonstrate how the company is making informed decisions and measuring and managing progress.
• Transparency—Companies should also respond to investors’ calls for more consistent, comparable and reliable ESG disclosures. This means getting ahead of emerging global reporting standards, improving ESG data quality and using assurance to build trust. In Asia Pacific, 92% of investors believe it is important that ESG reporting and data receives independent review and assurance.

2. Begin integrating sustainability reporting with finance.
Eventually, uptake of the ISSB standards means financial and sustainability reporting will become integrated. As a starting point, finance leaders and teams should more closely connect with the sustainability reporting agenda:

• Address the data challenge—Finance functions will need to gather, clean, analyze and visualize nonfinancial data to both support reporting and decision-making.
• Collaborate across organizational boundaries—Finance teams will be required to collaborate with sustainability teams and the broader enterprise to transform the quality and accessibility of ESG data and solve how to calculate the P&L impact of nonfinancial information.
• Upskill the finance team—Finance people should be embedded in sustainability teams to learn about the nuances, limitations and implications of nonfinancial information.

While companies are starting to make progress on sustainability objectives, investors still feel strongly that they are not getting the quality of ESG data required to evaluate a company’s strategy and risk profile. It is an information gap that threatens to stifle organizational access to capital and ultimately, slow down decarbonization progress.

A company’s sustainability disclosures provide vital insights to help the region’s investors understand the impact of sustainability issues on a business’s performance, risks and long-term growth prospects.

Asia-Pacific organizations that are serious about securing trust and a reputation for long-term ESG focus must ensure sustainability is built into their reporting processes—systemically, strategically and rigorously. Only then will we see investor skepticism in the region subsiding and businesses being recognized for their efforts to become more sustainable.

Download the full report: EY Global Corporate Reporting and Institutional Investor Survey

www.ey.com/en_gl/climate-change-sustainability-services