Sustainability reporting is a way for companies to communicate to stakeholders their sustainability performance, from their corporate governance to their environmental and social impact. Through sustainability reporting, companies can reflect and map out their journey towards achieving their sustainability goals and targets. Stakeholders are also able to engage with businesses and create better data-driven decisions as the growth of businesses now not only just includes its financial performance but its sustainable development.
Thailand has taken its initiatives towards sustainability by mandating sustainability reporting for listed companies from 2022. Integrated into the required annual report detailed in Form 56-1 One Report, sustainability reporting is now given more focus and companies are pushed to act and further develop their sustainability strategies, keeping up with both local requirements and global standards.
According to Form 56-1 One Report, which elaborates on mandatory annual reporting for listed companies, sustainability reports require the following: policy and objectives of sustainable management, management of impact on stakeholders in the business value chain, environmental sustainability management, and social sustainability management.
For policies and objectives of sustainable management, companies are to disclose their sustainability management policy and how it is incorporated into the overall business strategy and growth. These policies should also consider the company’s corporate governance, and environmental and social issues. Sustainability objectives of the company, both short and long-term are enumerated in this section. Reports should also inform stakeholders about any changes made in the company’s sustainability management policies and objectives.
The sustainability report then goes in depth on the company’s value chain, their stakeholders, and how these two interact with one another. Companies are asked to describe the characteristics of their value chain, how their activities impact their stakeholders, and how the business responds to stakeholder expectations. Companies are also to disclose internal and external stakeholder groups, their expectations from the company, and their relationship with the business value chain.
Environmental sustainability management is a key requirement in sustainability reporting in Thailand, where companies report their policies and guidelines related to environmental sustainability, and their operating results. Companies are required to describe sustainability policies and guidelines and how these are aligned with environmental laws applicable to the company’s business operations. Environmental sustainability commitments, such as waste reduction, renewable energy transitions and/or short or long-term environmental management objectives are stated as well. Action plans, results and outcomes related to the company’s environmental impact are reported for material disclosures. Information on the company’s greenhouse gas emissions are also required in a company’s sustainability report.
For a company’s social sustainability management performance report, businesses are asked to disclose policies, guidelines, and objectives in relation to social sustainability. This area covers fair labor, human rights, community involvement, responsible production, and the like. Companies are also required to share information on their social responsibility performance and action plans.
In the case a company was non-compliant or had violated environmental and social laws and regulations, the sustainability report should also contain clarifications, explanations, and future preventive measures to be undertaken by the company.
Additional information on their sustainability performance and operating results may be released yet the company must observe sustainability reporting standards, such as the Global Reporting Initiative (GRI).
If a company does not have sufficient or complete information, they are to disclose that they have not prepared the specific section. Additionally, if plans to publish sustainability policies and guidelines are currently being developed, the company must disclose the publication year.
In building a sustainability report in Thailand, companies only need to discuss the essence of their sustainability policies and guidelines in their annual report. Full documentation is disclosed on the company’s website. If the company also releases a sustainability report separate from the annual report, the annual report can simply contain a summary of the reporting requirements and a reference to their sustainability report.
To support the sustainability reporting endeavors of companies, the Stock Exchange of Thailand published a Sustainability Reporting Guide. The guide helps companies enhance their reports by providing more details on ESG metrics and targets that may be applicable for their sector and industry. This guide would also be able to ensure that sustainability reporting in Thailand observes the best reporting practices locally and globally.
Thailand aims to be carbon neutral by 2050, targeting net zero by 2065. Since implementing mandatory reporting, PwC reports that the disclosure rate for companies listed in Thailand is 100%. However, sustainability reporting can still be open to changes to steer greater progress towards Thailand’s sustainable development goals as it is a practice that continuously improves over time.
Sustainability reporting evolves along with businesses and the environment. By keeping up with global trends in sustainability reporting and adding assurance to ensure accurate and true reporting of ESG metrics, sustainability reporting in Thailand can be more robust and reliable. Thailand and its clear approach towards sustainability allows its listed companies to improve their sustainability performance and keeps businesses engaged with its stakeholders and the environment around them.
References:
2. The Stock Exchange of Thailand. Sustainability Reporting Guide for Listed Companies
3. PwC (2023). Sustainability Counts II (Second Edition).
At Keslio, we are deeply passionate about sustainability, equipping us with the expertise and extensive network needed to guide clients through their sustainability journey effectively and efficiently. Our expertise is particularly valuable for companies looking to embed sustainability practices into their businesses and investors looking to integrate ESG and impact into investment portfolios. To learn more about how Keslio can assist your organization on its sustainability journey, please don't hesitate to get in touch with us.
