Most companies are reporting their emissions, but climate-related targets remain vague, says GRI.
Just 26% of 420 listed companies across the Association of Southeast Asian Nations (ASEAN) region have outlined how long-term climate change factors have informed their climate risk strategy, according to a new report by the Global Reporting Initiative (GRI).
The report, created in collaboration with the National University of Singapore (NUS), assessed the climate-related disclosures made by companies in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam since 2020.
Eighty-four percent reported on climate-related topics that are most material to them, the report said, adding that three-quarters have reported on their contributions to the UN Sustainable Development Goals (SDGs). In particular, Thai and Indonesian companies disclosed their progress against the SDGs, at 95% and 93% respectively.
There is no common sustainability reporting framework across the ASEAN region, GRI said. The use of frameworks such as the Taskforce on Climate-related Financial Disclosures (TCFD), International Integrated Reporting Council (IIRC) and Sustainability Accounting Standards Board (SASB) is very low, with none them being used by more than a fifth of assessed companies.
Dr. Allinnettes Adigue, the GRI’s ASEAN Region Head, said: “It is encouraging that our research with NUS finds many large businesses in the region are reporting on climate – although more progress is needed. With 85% of the companies relying on the GRI Standards for their climate disclosure, it demonstrates the importance of robust and globally-applicable reporting frameworks.”
There are regional discrepancies between disclosures on greenhouse gas (GHG) emissions, the report said.
Sixty-two percent of all assessed companies disclose their emissions, with the Philippines leading the way at 80%, and Vietnamese companies falling behind at 5%. That is 55% less than the next worst country – Malaysia – at 60%.
Of the 420 companies, 19% reported their Scope 1 emissions disaggregated by source type, 10% reported their Scope 1 emissions disaggregated by facility, and 18% reported their Scope 2 emissions disaggregated by source type.
Just 22% of companies have set targets related to increasing their low-carbon energy consumption, 10% on achieving net-zero carbon emissions and only five on reducing methane emissions.
Fifty-six percent of businesses were found to have identified climate change opportunities, but only 47% have disclosed their climate risk mitigation plans. While three-in-four companies disclosed metrics on climate-related performance, less than half (46%) outlined how climate-related targets have been selected. Just 8% of companies directly link management remuneration to climate performance.