'The CSRD has sparked a global shift toward assured integrating reporting'
Nearly all businesses in Singapore are prioritising the reporting of environmental, social, and governance (ESG) efforts ahead of international regulations on sustainability disclosures, according to a new report.
Workiva's global survey, which included respondents in Singapore, revealed that 96% in the state are putting a greater premium on ESG reporting than previous years.
It found that 97% agree that integrated financial and sustainability data enables better decision-making that can improve financial performance, with 100% saying integrated reporting will have a positive impact on a company's long-term value creation.
ESG regulation's ripple effect
These sentiments come more than a year after the European Union implemented its Corporate Sustainability Reporting Directive (CSRD), which requires organisations companies to report on their social and environmental risks, among others, if they generate over EUR150 million on the EU market. The first companies subject to the regulation will publish their reports in 2025.
Nearly three in four (73%) Singaporean businesses will need to comply with the CSRD, according to Workiva's survey, which also uncovered a large ripple effect stemming from the regulation.
Nearly 80% of businesses in APAC - and 81% globally - that are not subjected to the CSRD are still planning to align their sustainability disclosures partially and fully with the directive's requirements.
Paul Volpe, Senior Vice President of Growth Solutions at Workiva, said the adoption of the CSRD was a "pivotal moment" as it marks the first major regulation calling for integrated financial and sustainability disclosures with third-party assurance.
"Now, as companies around the world gear up for their first mandated CSRD reports in 2025, we're seeing its impact extend far beyond those subject to the regulation," he said in a statement.
"The CSRD has sparked a global shift toward assured integrating reporting, with business leaders recognising the market demand for contextual, transparent, and credible data that aligns with stakeholder expectations."
Reporting challenges
Paul Dickinson, a member of Workiva's ESG Advisory Council and the Founder Chair of CDP, said their findings underscore how regulation is "serving as a catalyst for innovation."
"Companies are seizing the opportunity to improve their sustainability disclosures, effectively making assured integrated reporting the gold standard in corporate reporting," he said.
However, he pointed out that there are also "significant hurdles" for teams due to the regulation. In Singapore, 79% said it will be a challenge for them to collect accurate data to fulfill CSRD requirements. Another 92% said they are also concerned about their company's ability to collect and share information with other organisations in their value/supply chain.
Workiva's survey polled 2,204 ESG practitioners across the world. There individuals include those who are involved in ESG reporting, such as executives as well as finance and accounting, sustainability, internal audit, legal, and compliance professionals.
Addressing challenges using technology
To address these challenges, professionals involved in ESG reporting are turning to technology, such as generative AI, to simplify reporting processes, according to Workiva's survey.
More than eight in 10 said generative AI will make it easier for them to do their jobs (82%) and make sustainability reporting more efficient (85%) in the next five years.
In Singapore, 96% of organisations there plan to allocate more budget to technology for ESG initiatives, according to the report. Another 87% said they plan to implement digital transformation projects to improve collaboration among reporting teams.
"What we're seeing today, particularly in Singapore and APAC, is a mindset shift towards digital transformation as companies adapt to the shifting sands of regulatory demands and compliance obligations," Erik Saito, Senior Vice President and General Manager of Europe, Middle East and Africa and Asia Pacific at Workiva, in a statement.
"The embracing of digital transformation and adoption of technologies such as cloud solutions and generative AI will prove critical in helping organisations streamline processes and integrate seamlessly with existing enterprise systems, creating a single source of truth for data and helping organisations navigate an increasingly complex business and regulatory landscape."
