A recent report by PwC Singapore and the Centre for Governance and Sustainability (CGS) at NUS Business School spotlights the mixed progress of Asia-Pacific companies in achieving net zero targets and advancing sustainability practices.
According to the Sustainability Counts III: Sustainability Reporting in Asia Pacific, of the 700 companies studied, 53% (371 companies) have committed to net zero, up from 47% (329 companies) recorded in 2023. However, only 18% of these targets have been verified by the Science-Based Targets initiative (SBTi), reflecting a significant gap in robust and credible target-setting. Although 37% describe their targets as science-based, SBTi verification remains limited.
The report also noted progress in emissions disclosures. Scope 1 and Scope 2 emissions reporting rose from 80% to 88% year-on-year. Scope 3 emissions disclosures climbed from 50% to 63%, yet companies often focus on simpler categories such as business travel, with limited breakdowns of more complex areas.
Regarding materiality, 51% of the 638 companies addressing this issue reported using a double materiality approach, combining impact and financial materiality. Of the 357 companies conducting climate scenario analysis, 45% provided both quantitative and qualitative scenarios, while 46% disclosed only qualitative ones, suggesting ongoing challenges in quantifying climate risks.
Biodiversity and nature-related reporting has also grown, with 62% of companies including this in their disclosures. However, only 7% referenced the Taskforce for Nature-related Financial Disclosures (TNFD) framework, indicating room for improvement.
The study reviewed the top 50 listed companies in 14 Asia-Pacific jurisdictions, revealing that 81% of 650 companies have disclosed processes for managing climate-related risks and opportunities, up from 74% last year. Notably, nine of the 13 jurisdictions analysed, saw increases in such disclosures.
Overall, the report highlights a steady rise in net zero commitments and emissions reporting across the region. However, the relatively low levels of SBTi verification and Scope 3 detail highlight the need for greater ambition and rigour in sustainability practices.
Director of the Centre for Governance and Sustainability at NUS Business School, Professor Lawrence Loh said, “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.”
“We seem to have built strong ‘muscles’ across several areas including sustainability governance, identification of sustainability material topics, identification of climate risks, 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 PwC Singapore’s sustainability and climate change leader Fang Eu-Lin.
