www.pwc.com/asiapacific Sustainability Counts Understanding sustainability reporting requirements across Asia Pacific and insights on the journey to date May 2022 Contents 01 Introduction 4 02 A changing world: The need for new sustainability reporting regulations and standards 5 03 How sustainability reporting standards, frameworks and enablers are changing 8 04 An overview of sustainability reporting requirements across Asia Pacific 13 05 The state of sustainability reporting: Key insights 22 06 Our approach to sustainability reporting excellence 32 07 Other useful information - Appendix Sustainability reporting requirements in other key jurisdictions 40 An overview of sustainability reporting requirements specific for financial institutions across Asia Pacific PwC | Sustainability Counts 2 Report highlights Why sustainability reporting matters • With increasing expectations on sustainability, it makes good business sense to focus on high quality sustainability reporting rooted in consistent, comparable and trusted sustainability information. • Quality sustainability reporting can build trust through transparency and managing risks and opportunities. This can in turn enhance corporate value and resilience. • However, critical elements need to be in place to achieve this including globally aligned sustainability reporting standards, and independently assured disclosures. Evolution of global sustainability reporting standards and stepping up of sustainability reporting requirements across Asia Pacific • The complex ecosystem of sustainability reporting standards, frameworks and enablers are fast becoming clearer. • The creation of the International Sustainability Standards Board (ISSB) represents a step towards globally aligned sustainability standards that will drive consistency and comparability on sustainability reporting. • Concurrently, there are notable increasing sustainability reporting requirements, including in climate reporting requirements, by regulators across respective jurisdictions in Asia Pacific. • Reporters need to stay abreast of their local requirements, in addition to the global standards. Key insights from the state of sustainability reporting in Asia Pacific • Almost all companies across jurisdictions disclose material topics, with 62% disclosing 10-20 material topics and 80% further disclosing the selection process on materiality. • More than 70% of companies across nearly all jurisdictions disclose climate risk as a sustainability issue. However, most do not disclose how climate risk integrates into the organisational risk management. • SDGs and GRI, followed by TCFD are most commonly used. As TCFD to be mandated in certain jurisdictions in the future, we expect that there will be an uptake in the TCFD-aligned reporting. • Board of directors’ training and linkage of ESG performance to remuneration appear to be moderate to low. However, Australia has more instances in terms of linking ESG performance to remuneration. • Most jurisdictions do not have high rates of assurance over sustainability reports, apart from Taiwan (which has mandated specific assurance requirements). • There are mixed results over board responsibility on ESG and ESG governance structure disclosures. Australia, Hong Kong, Malaysia and Singapore have higher numbers of companies disclosing board of directors’ responsibility and an ESG governance structure. Achieving sustainability reporting excellence • Starting your sustainability reporting journey early and building a roadmap for sustainability reporting excellence, can put your organisation ahead of regulations and key stakeholder expectations. • To drive sustainability reporting excellence in your organisation, it is important to appreciate the key areas for sustainability reporting excellence, why each are is relevant and what it would entail across maturities. PwC | Sustainability Counts 3 01 Introduction As the business world continues to address wide-ranging environmental, social and governance (ESG) issues, there has been strong focus on the development of globally consistent, comparable and trusted sustainability reporting standards. At the same time, many jurisdictions are requiring or recommending greater sustainability reporting, particularly from listed entities. There also appears to be rising expectations on external assurance of these reports. PwC How are global sustainability reporting standards developing? What are the local re