In recent years, sustainability has been at the forefront of every country's agenda. 2023's climate is not a projection of the future but is a current reality of the world: the world has entered the era of "global boiling," as announced by UN Secretary-General Ant?nio Guterres recently.
Back in 2015, the United Nations announced 17 Sustainable Development Goals (UNSDGs) that encompass three major pillars of Environmental, Social, and Governance, driving the world toward a better and more sustainable future. UNSDGs have been a guiding principle in the private and public sectors alike, which saw the shift of the singular focus on monetary profits and commercial gains to include the well-being of the planet and the people simultaneously. Capital markets and businesses have started to incorporate ESG (environmental, social and governance) in their visions, missions, and operations to appeal to the increasingly sustainability-oriented interest of investors, as seen from the net asset value of Global Sustainable Funds that reached USD 2.74 trillion in March 2023, a 7.5% increase from 2022 year-end while outgrowing other funds around the world by 4%.
As for Thailand, the country has seen key milestones in sustainable development. The Securities and Exchange Commission (SEC) of Thailand has made sustainable development strategy disclosure a part of Thailand's mandatory reporting requirements for listed companies focusing on ESG data, especially greenhouse gas emissions. Reporting has then become one of the mechanisms to ensure the private sector's commitments are properly communicated and kept accountable for their sustainability aspirations and impacts on an annual basis. Not only is reporting key in pushing Thailand towards net zero emissions, but it also helps attract investment and business opportunities, as well as build a business ecosystem with effective, practical, and measurable sustainability practices at the core.
While the sustainability space in Thailand is ramping up from both the regulation and market sides, reporting plays a vital role in keeping track of how well Thailand is doing with its sustainability commitments, which is reflected by the performance of Thai corporations' sustainability actions. For a report to be effective, ESG data is crucial to complete the picture of the performance; for instance, a clear pattern of greenhouse gas emissions reduction year to year reflects a step towards the net zero ambition.
However, not everyone is ready to disclose such information. There is a disparity between the advanced, intermediate, and beginner groups in the way they prepare such data. The frontrunners are well-oiled machines with dedicated resources and tools at their disposal to collect information and have done so many cycles before. Some in the intermediate group may have only started out through trial and error in the data preparation and collection process and are looking for ways to optimize. Meanwhile, beginners are looking for guidance and assistance in setting up such a system. Sustainability reporting, especially for beginners, can be complex and perplexing to those unfamiliar with the related terms and definitions and the many principles, standards, and frameworks.
ESG data plays a pivotal role in sustainable development, yet the process of collecting it presents significant challenges and is prone to errors. Toshihide Otani, Director of Sustainability Transformation at ABeam Consulting (Thailand), emphasizes the importance of ESG data: "For a meaningful and accurate sustainability report, ESG data is indispensable. It not only holds corporations accountable for their commitments, especially in climate-related areas but also facilitates swift actions and the identification of critical sustainability issues. As the saying goes, you cannot manage what you can't measure." Despite the strenuous nature of data collection and the deployment of system tools for governance and controls, errors persist due to the human element in manual recording, affecting organizations of all levels of advancement.
Creating meaningful, clear, and precise ESG reports involves selecting appropriate data collection tools that align with an organization's maturity and readiness. ESG data remains critical for holding corporations accountable and enabling proactive sustainability initiatives. ABeam Consulting has seen firsthand the challenges of our clients in addressing these roadblocks, leading us to view that the future of ESG data lies in automation, which reduces labor requirements and associated risks. This shift towards automation empowers organizations to validate their sustainability efforts with data and paves the way for Thailand to unlock the full potential of sustainable development. With automation, we increase our chances of achieving our net-zero carbon ambition and transitioning towards a greener economy.
For more information about Sustainability Transformation Services, contact ABeam Consulting (Thailand) at [email protected].
Source: ABeam Consulting (Thailand)