Deloitte Thailand survey reveals several challenges in integrating ESG into a corporate strategy ranging from risk assessment and cost savings to finding new markets and business opportunities.” How organizations are navigating risks and embracing opportunities associated with these dimensions to protect the long-term interests of business and its stakeholders will increasingly come into focus.
During August – September 2022, Deloitte surveyed C-suite respondents and executives at various levels from 106 leading companies in Thailand covering key industries, for example, Consumer Products, Energy, Resources, Industrials, Financial Services, Technology, Media and Telecommunications, Life Sciences and Health Care, and other. The survey on Thailand’s ESG and sustainability focuses on how environmental and social concerns transform business landscapes today.
Mr Kasiti Ketsuriyonk, Sustainability & Climate Leader at Deloitte Thailand, said, “Today, ESG (Environment, Social and Governance) issues are at the forefront of a business decision. The poll found that ESG is becoming more crucial than ever at this pivotal moment in history and has been made in standardizing and quantifying measures of the organization’s performance according to ESG criteria. In addition, investor interest in companies actively pursuing ESG goals is becoming more prevalent.
Deloitte Thailand has released the ‘Thailand ESG and Sustainability Survey Report 2022’.
The Roles of Finance in Sustainability
85% of the respondents in the Finance or accounting field agreed that Sustainability plays an increasingly important role in corporate finance, and the majority prioritize their role in reporting on sustainability KPIs or metrics as part of the standard cycle. Moreover, the poll found that lack of technology for effective data collection, lack of talent and skills within the organization, and data unavailable are the main gaps respondents saw in efficiently fulfilling reporting requirements on Sustainability.
Dr Narain Chutijirawong, Executive Director of Clients and Markets, Deloitte Thailand, added, “Now, it is time for businesses to start integrating ESG as a strategic priority, set targets and corporate sustainability process for ESG implementation, and prepare for ESG data disclosures which have become mandatory through paths that are environmentally and socially responsible.
Deloitte’s survey found that 51% of respondents currently report on ESG management approaches and KPIs as part of their reporting cycle.
Systems, Processes, and Data
Almost half of the respondents were concerned that their organization lacks the adequate technology tools to facilitate new ESG disclosure requirements. In addition, most respondents believe that better corporate sustainability performance will bring about the top three key benefits: Operational efficiency and cost saving, Brand credibility and image, and risk management. Global Reporting Initiative (GRI) is the primary ESG disclosure standard used among respondents, and Internal ESG KPIs are primarily used to set their data collection template and structure.
Most respondents use standard spreadsheet templates throughout the organization to collect data on ESG. The survey found that most business leaders prioritize awareness of ESG in the organization and integrating ESG into the corporate strategy. Unlisted companies also aim for sustainability goals to be fully integrated into the enterprise performance management process. Remarkably, the listed companies have a higher percentage of established sustainability committees than the unlisted companies.
C-Levels tend to spotlight ESG reporting in line with the 56-1 One Report, which has improved disclosure efficiency by presenting how business is operated under ESG. Some set clear roles and responsibilities for the board of directors in driving corporate sustainability. At the same time, 19% saw finance as the driver to define and meet sustainability targets. However, a quarter of respondents collected ESG data but do not disclose it to the public. Encompassing Sustainability will help companies to get out front from the pandemic and create resilience to future disruptions.”
Additionally, 34% of respondents already have a sustainable committee to oversee or drive ESG in their businesses. However, this method would not be suitable for some companies with several operation processes that might pass to consolidate a single function or perform it separately. It is also focusing on innovations for low carbon economy as they might be pressured by Social licenses to Operate as their activities impact the environment and economy of local communities.
Written by: Supaporn Pholrach (Joom)