How APAC Companies Are Embracing ESG Reporting Standards

ESG reporting involves sharing data on a company’s environmental, social, and governance practices. Its goal is to provide clarity on a company’s ESG efforts, enhance transparency for investors, and encourage other organizations to follow suit. It is also a powerful way to demonstrate genuine progress toward achieving certain goals, proving that a company’s ESG initiatives are meaningful and not just greenwashing or empty promises. 

There is also a role here, of course, for PR professionals in advising companies on these important initiatives – and helping build stakeholder support and understanding, even in the face of the challenges of meeting ESG goals. 

The APAC region has seen a significant rise in the adoption of ESG regulations in recent years. This trend has pushed businesses to recognize the growing importance of sustainable practices and sustainability reporting standards. At the same time, government and regulatory authorities are increasingly acknowledging the role of ESG factors in guiding corporate decisions and building stronger investor relationships. 

It is now widely recognized that strong ESG performance can significantly influence a company’s long-term financial success and impact its risk profile. Several jurisdictions in APAC are adopting either a voluntary approach or mandated regulation in their local sustainability reporting standards, complementing global initiatives like the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD). For example, as of September 2024, 14 jurisdictions in Asia had either adopted or announced plans to adopt the International Sustainability Standards Board (ISSB)-based disclosure requirements, according to S&P Global data.  

The reporting systems and available guidance across APAC are highly diverse, with each country offering a unique regulatory landscape. Below, we explore the ESG reporting frameworks in Australia, China, Hong Kong, and Singapore, highlighting key requirements and trends. 

Australia 

Australia is aligning with global standards like the Task Force on Climate-Related Financial Disclosures (TCFD) and the International Sustainability Standards Board (ISSB) frameworks, mostly targeting larger companies, listed entities, and those with significant environmental or social impacts.  

Regulators like the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) are also helping businesses adapt by offering guidance on how to manage and disclose climate risks. Many companies are already making voluntary ESG disclosures, often using international frameworks like TCFD or the Global Reporting Initiative (GRI). 

In 2025, the largest companies will need to report on climate-related risks under the new Australian Sustainability Reporting Standards (ASRS). While other smaller entities will be progressively phased into reporting obligations in 2026 and 2027 respectively. 

China 

China is also aligning its frameworks with international standards, such as the ISSB’s IFRS S1 and S2, while incorporating unique local priorities like rural revitalization and carbon neutrality goals.  

Locally, listed companies face tighter obligations under guidelines issued by major stock exchanges, such as the Shanghai and Shenzhen Stock Exchanges, which require entities in specific indices to disclose sustainability or ESG reports. Additionally, certain businesses, such as key pollutant-discharging entities, must comply with mandatory environmental disclosure requirements under the Ministry of Ecology and Environment (MEE). For other companies not subject to mandatory requirements, voluntary ESG disclosures are commonly applied, often following global standards like GRI and TCFD.  

Looking ahead, China aims to roll out a unified national sustainability disclosure system by 2030. The plan is to start with listed companies and gradually expand to small and medium-sized enterprises (SMEs), marking a clear move toward more consistent and standardized ESG reporting across the board. 

Hong Kong 

In Hong Kong, ESG reporting requirements primarily target listed companies and financial institutions, with a growing focus on climate-related disclosures.  

The Hong Kong Stock Exchange (HKEX) mandates annual ESG reports under its ESG Reporting Guide, with enhanced climate disclosure rules taking effect in 2025. Financial institutions, including banks and asset managers, are guided by the Hong Kong Monetary Authority (HKMA) and Securities and Futures Commission (SFC) to align with TCFD recommendations, aiming for full compliance by 2025. While larger listed companies face stricter mandatory reporting, smaller entities and SMEs can adopt a “comply-or-explain” approach.  

Hong Kong is also moving toward adopting ISSB standards, with plans to develop local sustainability reporting and assurance frameworks.  

Singapore  

Singapore has also established robust ESG reporting standards aimed at driving transparency and accountability among businesses. Listed companies on the Singapore Exchange (SGX) are required to publish annual sustainability reports on a “comply or explain” basis, covering material ESG factors, climate-related disclosures, sustainability policies, and targets. Starting in 2025, these reports must align with the ISSB standards, making climate-related disclosures mandatory for all listed companies. Large non-listed companies (NLCos) will follow suit by 2027.  

The Monetary Authority of Singapore (MAS) further enforces ESG disclosure guidelines for financial institutions and retail ESG funds, requiring alignment with global frameworks like TCFD and ISSB. While voluntary for smaller firms, Singapore’s ESG initiatives like the Green Finance Taxonomy and Project Greenprint, provide significant support for businesses to adopt sustainable practices.  

Challenges APAC Businesses Face in ESG Reporting 

As ESG reporting standards continue to evolve across the region, businesses are grappling with a range of challenges. These challenges come from the complexity of new regulations, limited resources, and the need to align with both local and international standards. 

One of the most significant challenges is that ISSB standards mandate the reporting of Scope 3 emissions—indirect emissions generated by a company’s supply chain and external activities. These emissions are more difficult to measure and control, yet they can account for up to 90% of a company’s carbon footprint.  

With 14 jurisdictions adopting or planning to adopt ISSB-based requirements, it creates compliance challenges for businesses operating across multiple markets, as they must navigate varying timelines, scopes, and standards. At the same time, businesses need to align their reporting with other international frameworks like ISSB, TCFD, and GRI while complying with local regulations.  

Second, while many countries are imposing the toughest requirements on listed companies first, starting with the biggest, they are also extending their regimes to smaller listed companies and to unlisted companies. Those businesses sometimes lack the resources, expertise, or infrastructure to meet these standards, thus the expanding regulations are a growing burden on them. 

Adding to the complexity is the European Union’s Carbon Border Adjustment Mechanism (CBAM), which imposes costs on carbon-intensive goods entering the EU based on emissions data. Asian exporters, particularly in sectors like aluminum, steel, and cement, must now monitor and report embedded emissions to meet EU trading partners’ demands. 

The Role of PR in ESG Reporting 

At its heart, public relations focuses on raising awareness and shaping understanding and support about and for a company’s goals and the actions it takes to achieve them. This makes marketing communications and PR essential partners in crafting and executing strategies to effectively communicate a company’s ESG efforts. But more than that, PR is instrumental in helping define and align messaging with audience expectations, ensuring authenticity, and amplifying impact. Here are a few examples of how PR professionals can contribute to ESG reporting: 

• Develop a Clear ESG Narrative and Framework: Authenticity is key when it comes to sustainability messaging. PR experts can help businesses articulate their ESG goals, outline actionable plans, and define measurable outcomes. They also excel at translating complex ideas into clear and compelling messages that resonate with stakeholders, including investors who increasingly demand transparent ESG reporting.

• Leverage Data and Storytelling to Showcase ESG Efforts: PR teams can help identify which ESG initiatives are most impactful and newsworthy for companies to share in communicating their progress in meaningful ways. The goal is not just to gain recognition, but to build trust with consumers and investors while inspiring others to adopt similar practices. This can be achieved through success stories, case studies, or visually engaging formats like infographics that highlight data and results.

• Ensure Transparency and Authenticity in Communication: Companies often face the temptation to highlight only positive outcomes, which can lead to accusations of greenwashing or selective reporting. PR professionals play a critical role in guiding businesses to communicate their ESG efforts honestly and effectively. In cases where goals have not been met, that means providing a clear and credible reason why. By prioritizing transparency, they help companies build credibility and foster long-term trust with their audiences.

Looking Ahead 

Despite these challenges, ESG reporting also presents opportunities for businesses to improve sustainability practices and gain a competitive advantage. Regulators and organizations worldwide are also continuously accessing different frameworks to simplify the process to reduce companies’ reporting burdens. For example, the EU’s Taxonomy Regulation is being advised for revisions to simplify the process of determining material metrics and reduce reporting burdens, which could serve as a practical guideline for reporting a company’s ESG activities.  It could potentially facilitate more efficient reporting of different companies’ initiatives, such as supply chain decarbonization and responsible sourcing practices. By addressing these challenges head-on, APAC businesses can not only meet regulatory demands but also build resilience and long-term value in an increasingly sustainability-focused world.