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Sustainability reporting can help GAR become a world-class company

Posted: Jul 27, 2017 3 minute read Lim Shu Ling 0 Likes

Sustainability reporting is still relatively new to us here in Asia. In Singapore, only a handful of listed companies – Golden Agri-Resources (GAR) being one of them – publish Sustainability Reports regularly. It’s been viewed very much as a nice-to-have-add-on report to the Annual Report, but one which most companies do not have the resources to produce.

But the times are changing.

Regulators across the region are demanding that listed companies produce an annual report on their environmental, social and governance or ESG factors. This is now seen as part of the responsibility that a company has towards its shareholders and investors.

Aside from the Sustainability Report, GAR also takes part in disclosing ESG information on various international platforms including the Carbon Disclosure Project; the Dow Jones Sustainability Index; and is regularly assessed by the Zoological Society of London which ranks palm oil companies in their SPOTT (Sustainable Palm Oil Transparency Toolkit) platform as well as the UN Guiding Principles Reporting Framework.

Preparing the GAR Sustainability Report and taking part in these disclosures require a great deal of investment in time and resources. My colleagues and I spend months badgering colleagues for data and preparing the responses. It begs the question: is all this effort really worth it?

We have set aside around 72,000 hectares – an area roughly the size of Singapore – of forests for conservation.

What is the value of reporting?

In order to manage something, we have to be able to measure it. While financial reports tell the story of how we’ve done in terms of profit and loss for the last year, it is the Sustainability Report which delves into the rest of the business and attempts to measure impacts on the natural environment or local communities or the well-being of the company’s employees. For example, tracking the rate and causes of workplace accidents and occupational illness helps the company understand where the action is most clearly needed to safeguard the wellbeing of the company’s greatest asset – its workforce.

Preparing these disclosures also makes us aware of changing trends in investor interest.

The more savvy investors now want to know not only how a company is mitigating an ESG risk such as climate change but also whether the company is aware of the opportunities and are positioning themselves to take advantage of them. There are now modelling tools that enable companies to report this using accounting concept such as Return On Investment (ROI) or Profit and Loss (P&L). Whether or not this is the best way to do it is another story; investors want this information because they need it to inform their investment strategies in a world that has to count the cost of climate change.

Ensuring world-class standards at our refineries.

Reporting and disclosing information can also provide us with lessons and guidelines on how we can become a world-class company. Through reporting using globally accepted frameworks (such as the Global Reporting Initiative Standards we base our annual Sustainability Reports on) or on global platforms, we join the worldwide fraternity of companies that essentially agree that these factors and indicators are important. Our continued participation means that we too have to take on board these international norms and show progress as a responsible company. We become better because we are now measuring our performance amongst the best in the world.

At times the reporting burden can seem daunting, but reporting on matters other than our financial situation and business plans not only helps our external stakeholders understand better where we are headed, it can also help us internally to become better organised, more focused, and ultimately a better company.

Get a snapshot of how palm oil contributes to the UN’s Sustainable Development Goals here.

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