Credible. Simple. Sustainability Reporting.

Let these four words live and breathe together.


“From complexity comes stress, anxiety and frustration – even rage – followed by apathy and exit. But you do not have to be a victim any more.”

Edward de Bono, Philosopher


Companies are increasingly looking at planning their Sustainability Reporting to comply with SGX Sustainability Reporting Guidelines. Many are integrating sustainability risk management into the business.

Such work, coupled with the process of preparing a Report, can help meet investor analysts’ needs, showcase the forward looking approach of management and improve access to finance. The work you put in will also help preserve your license to operate, save costs, attract and retain talent, create innovation and lead to new markets. A bunch of companies recently shared their views on this at a free Paia breakfast briefing.

But what if your customers and investors are expecting a response to sustainability and you don’t have one?

You need to get started.

  1. First, list who your stakeholders are. These are people and groups who, (i) are affected by your organisation, and (ii) who affect you. Decide how you wish to engage with them, if you’re not already (eg customers and suppliers will likely be sharing views on certain issues already).
  2. Then list ESG issues – Environmental, Social and Governance risks and opportunities. Keep it a deliberately long list. Even if your business is a holdings company for example there will be ESG issues to consider.
  3. Then, with the help of a small specialist advisory firm, use a couple of processes and techniques to filter out what matters; and then develop a sustainability report on it.

Wider sustainability risks may be new to your commercial and governance teams. If so, a credible approach to dealing with them is to understand what matters, and to whom. There are hundreds of risks, many with perhaps only marginal relevance to you. A credible approach uses tried and tested techniques (eg, materiality). The stakeholder list is used in such work.

“Credible” need not mean complex. Having seen various approaches to sustainability management and reporting over the last 20 years, we at Paia want companies to embrace sustainability as part of doing business, but in a straight forward manner. “Simple” means clarity, understanding, engagement. Depth and reach can come later. And government, regulatory, investment and other institutional stakeholders encourage baby-steps first, to encourage uptake.

To make sure life remains simple you will need to plan. So, as we said in June, you will benefit from an early start on tasks such as issues prioritisation, resourcing, policy development, content management, design etc. As I write it’s September: this is ‘Kick-off’ month for most. Don’t leave it to the 11th hour!

Some of you may be wary of targets and how to use them in sustainability management practice. If, for example, you’re listed on SGX then take heart: SGX rules allow targets to be qualitative. So that allows for simplicity. At first. As part of a phased approach to corporate sustainability programmes and reporting you’d be wise to talk with your stakeholders on what targets and KPIs would be appropriate. Paia is experienced in this.

Keep it simple, feasible, manageable. Plan it, lay the foundations, set targets, ensure an efficient project, make sure the output is credible and benefits your business.


Alex Nichols

Sept 2016


NUS’s CGIO and ASEAN CSR Network look into Sustainability Reporting in ASEAN

On the 25th of February 2016, Paia’s Principal Consultant, Wong Dan Chi was invited as an industry panellist to comment on a report led by the Centre for Governance, Institutions and Organisations (CGIO) at National University of Singapore (NUS) Business School.

Paia is pleased to support research efforts on sustainability and governance, and is especially heartened to see the enthusiastic involvement of the student teams involved.

In 2015, CGIO was commissioned by ASEAN CSR Network to study on sustainability reporting in Indonesia, Malaysia, Singapore and Thailand. The research project, led by Associate Professor Lawrence Loh, Director of CGIO, is carried out by some 20 students from the BBA Honours programme.

At the event, five teams of BBA Honours students from the NUS shared their findings about the scope of reporting and levels of disclosure found in the 3 countries. The students did this by studying the top listed companies from each country, and assessed them by comparing levels of disclosures found in their respective sustainability reports according to the Global Reporting Initiative’s framework.

Along with industry experts including corporate leaders such like Singtel, Keppel Land, and CDL, Dan Chi, provided critique and assessments of the teams’ conclusions and recommendations. The dialogue and feedback broadened the conversation around sustainability in the region and leave with a better understanding of the state of sustainability reporting in ASEAN countries.

The report will be reviewed and launched during the Conference on Corporate Governance and Responsibility in July this year.

More information is available on the university blog:
CGIO presents update on its Sustainability Reporting project

SGX releases Consultation Paper on Sustainability Reporting

The Singapore Exchange (SGX) released a consultation paper, ‘Sustainability Reporting: Comply or Explain’ on 5 Jan 2016. In the consultation paper, SGX provides a background and reasons for sustainability reporting, before putting forward amendments to both mainboard and catalist rules, and reporting guidelines. The proposed amendments and the guidelines will be open for public comment until 5 Feb 2016.

The primary components proposed to be included in sustainability reports are:

  1. Environmental, social and governance (ESG) factors material to the company,
  2. Policies, practices and performance of the company in relation to each material ESG factors,
  3. Targets for the forthcoming year,
  4. The Sustainability Reporting Framework used, and
  5. A Board Statement confirming compliance with SGX’s guidelines or explaining incompliance

The guidelines also provide some flexibility to companies. A phased approach for implementation of sustainability reporting is recommended, such that newly reporting companies are given time to ensure that their sustainability disclosures have quality and depth. Companies are also not expected to provide independent assurance of their reports in the early stages.

SGX is also seeking feedback for the inclusion of Anti-corruption and Diversity as part of the primary components. Other features awaiting comment include matters relating to stakeholder engagement, materiality, responsibilities of the board, and frequency of reporting. For the latter, SGX proposes that reports be published annually, within 5 months after the end of each financial year. All listed companies will begin sustainability reporting for any financial year ending on or after 31 December 2017.

In line with SGX’s Guidelines, Paia is rolling out a Toolkit to simplify the reporting process specifically for SMEs. This Toolkit provides SMEs with the necessary tools to produce a sustainability report in line with SGX’s requirements. Read more about it here.


More information about the consultation paper:

  • Business Times, “Designing a sustainability reporting regime”, 6 Jan 2016
  • Business Times,“SGX offers flexibility in proposed sustainability reporting rules”, 6 Jan 2016
  • The Straits Times, “SGX to seek feedback for sustainability report guidelines”, 5 Jan 2016
  • Channel News Asia, “SGX seeks public feedback on proposed rules for sustainability reporting”, 5 Jan 2016

What is the difference between Sustainability Reporting & Integrated Reporting?

With the recent Singapore Exchange (SGX) consultation on its proposed “comply or explain” regulation to Sustainability Reporting, and an increasing number of companies locally producing Sustainability Reports, we felt there’s a need to clarify the difference between Sustainability Reporting and Integrated Reporting.

Sustainability Reporting is about communicating the organisation’s approach to managing its key environmental and social issues.  It is about communicating publicly how the company assesses which environmental and social issues are most significant to the company (“materiality”), how these issues are managed and how the company is performing against each of these key issues (performance data).  At Paia, we approach these issues as business risks, and opportunities.  Climate change, talent retention and employee diversity, for example, can pose both risks and opportunities for companies, so it is about communicating how the organisation is identifying and managing these risks and opportunities.

Integrated reporting is one step further – about communicating, how the company manages its long term value creation by taking an integrated approach to both traditional risks and these wider sustainability risks. Instead of reporting on financial performance and sustainability performance separately, or even within the same AR, Integrated Reporting intends to show how the company integrates environmental & social thinking into its business.

So for example, an integrated report goes beyond financial, employee, environmental and social data, to also demonstrate how the company integrates these broader risks and opportunities into its long term strategy, into its risk management, into operating policies and procedures, and what the trade offs between these issues are.

This means Integrated reporting pulls together information that sits in separate reporting strands to explain how the firm creates value. In the Singapore context, these reporting strands will include the i) Corporate Governance Statement, ii) Operating and Financial Review, iii) Financial Statements and more recently, iv) Sustainability Reporting.

“Sustainability reporting relates to one important aspect of a company’s performance, without which an integrated report would be incomplete.”

– Ian Ball, International Integrated Reporting Council (IIRC) Board member & Principal Advisor and ex-CEO of International Federation of Accountants (IFAC)

In Singapore, and the region, it is often the sustainability reporting which is the weakest link to integrated reporting.  Many companies in this region are only just beginning to develop their sustainability reporting practices.

So should companies just leapfrog to Integrated Reporting, and bypass Sustainability Reporting?  Companies don’t necessarially need to publish sustainability reports, but they do need to put in place the sustainability fundamentals, for which GRI provides clear guidance.  Paia’s experience of having worked with over 25 companies in Southeast Asia on both their sustainability and/or integrated reporting programmes, has taught us that it is fundamental for companies starting out in their reporting journeys to firstly identify what their key environmental and social risks and opportunities are, create management programmes to manage these risks and maximise the opportunities and develop KPIs to track environmental and social performance.  These are the fundamentals of sustainability reporting.

It takes time

To embed these systems takes a couple of years.  It takes time for companies to really grasp the business benefits of sustainability and develop appropriate systems to manage these risks in a way that is appropriate for the individual company.  It is only then that companies are ready to embrace integrated thinking and integrated reporting in a meaningful way.

We are a great supporter of integrated thinking; that has always been our approach.  We’ve had the please of working closely with many clients to integrate environmental and social risks into their ERMs, business strategy, policies, procedures and contract agreements, and this experience has taught us that it takes time to achieve this integration, as it requires some level of change management – for example to include environmental and social risks within business investment decisions.

Conclusion: get the sustainability part right first

Sustainability reporting tends to be the part of Integrated Reporting that Southeast Asian companies are weakest one, hence we recommend companies take time to embed sustainability, before proceeding to Integrated Reporting.


Carrie Johnson


Paia Consulting Pte Ltd


21 May 2015