Sustainability Reporting Will Pay Off For Firms Here In The Long Run: Experts

It Can Help Firms Spot And Rectify Problems Early, Attract More 'Eco-Conscious' Investors

- Sue-Ann Tan

Ramped-up rules on sustainability reporting might be burdensome for companies large and small, but they will pay off in the long run by attracting more "eco-conscious" investors, experts said.

A critical point in this process came in 2024 with the imposition of mandatory climate reporting across listed companies in certain sectors, including finance, agriculture, food and forest products, energy, materials and buildings, and transportation.

Climate reporting continues to be on a "comply or explain" basis for other listed firms for now.

There will be more compliance requirements in the 2025 financial year, when listed firms will have to report using climate-related disclosures aligned to the International Sustainability Standards Board.

This will apply especially to direct and indirect greenhouse gas emissions from a company's use of electricity, heat or steam.

More rules land in the 2027 financial year, when large non-listed companies will also be required to make sustainability disclosures.

Meeting such requirements certainly creates more costs for companies, experts said.

However, this should eventually reap benefits, particularly as global sustainability standards rise and companies will have to comply with international expectations.