The Asia-Pacific companies setting net zero targets are rising but present a mixed outlook, underscoring progress and challenges in sustainability, said the report by PwC Singapore and the Centre for Governance and Sustainability (CGS) at NUS Business School.
Asia Pacific companies setting net zero targets are showing mixed results for the region’s sustainability efforts, revealed the Sustainability Counts III report by PwC Singapore and NUS CGS.
While 53 per cent of companies set net zero targets, only 18 per cent have SBTi verification.
Scope 3 emissions disclosure rose to 63 per cent, and 62 per cent addressed nature and biodiversity.
The study also found an increase in the disclosure of Scope 3 emissions, though greater room for more information on relevant Scope 3 emissions categories remains. With global attention on climate action, the study – which reviewed the reports of the top 50 listed companies across 14 Asia Pacific jurisdictions– sheds light on the state of sustainability reporting in the region, Pwc and NUS said in a joint press statement.
Fifty-three per cent (371 companies) of the 700 companies studied have set net zero commitments, up from 47 per cent (329 companies) from last year’s report. Thirty-seven per cent of these 371 companies with net zero targets have described their targets as science-based, but only 18 per cent have had their net zero targets verified by the (SBTi). Sixty-three per cent of 650 companies disclosed Scope 3 emissions, up from 50 per cent of 700 companies from last year’s report; however, most offered minimal category breakdowns.
Of the 638 companies that described their approach to materiality, 51 per cent stated that they adopted the double materiality approach – a concept that combines both impact materiality and financial materiality. While close to half of the 357 companies, which carried out climate scenario analysis, disclosed both quantitative and qualitative scenarios (at 45 per cent), a similar proportion (46 per cent) have disclosed only qualitative climate scenarios, suggesting that quantifying climate-related risk remains a work in progress.
Sixty-two per cent have included sections on nature and biodiversity, although only 7 per cent referred to the Taskforce for Nature-related Financial Disclosure (TNFD) framework for their nature and biodiversity reporting.
Across Asia Pacific, 81 per cent of 650 companies studied have disclosed their process for managing climate-related risks and/or opportunities, an increase from 74 per cent of 700 companies from last year’s report. Furthermore, out of 13 jurisdictions, nine have seen an increase in disclosures of the process for managing climate-related risks and opportunities compared to last year’s report.
The study also revealed an increase in the disclosure rate for Scope 1 and Scope 2 emissions, which has risen from 80 per cent of 700 companies in the previous year to 88 per cent of 650 companies this year for both areas. Although the disclosure rate for Scope 3 emissions remains lower, it has shown notable improvement, climbing from 50 per cent to 63 per cent. Despite these advancements, many companies still focus on disclosing their Scope 3 emissions in less complex areas, such as business travel.
“While Asia Pacific companies have made significant strides in sustainability reporting, particularly with the notable growth in Scope 3 emissions disclosure, substantial gaps remain in verification and transparency. Few companies have validated their net-zero targets through the Science-Based Targets initiative, emphasising an urgent need for greater accountability. Echoing COP29’s emphasis on urgent climate action, our findings highlight the critical need for robust governance frameworks and actionable climate strategies to drive sustainable development across the Asia Pacific,” said Professor Lawrence Loh, director of Centre for Governance and Sustainability at NUS Business School.
“We seem to have built strong ‘muscles’ across several areas including sustainability governance, identification of sustainability material topics, identification of climate risks and opportunities and making a good start in acknowledging nature and climate dependencies and impacts. We will need to continue building ‘muscles’ in better climate risks quantification, Scope 3 comprehensiveness, and application of the TNFD, as we get better data and insights,” said Fang Eu-Lin, sustainability and climate change leader at PwC Singapore.
Fibre2Fashion News Desk (SG)
