CSR making slow progress in Asia: study

17 September 2010

SINGAPORE: Brand owners in Asia display a mixed record when it comes to developing and reporting their sustainability activities, a study has argued.

CSR Asia, the consultancy, and Responsible Research, the analytics firm, assessed how well 500 major businesses were performing.

The report covered 100 different criteria divided into four categories, namely general compliance with global standards, environmental matters, social schemes and governance.

"Around three-quarters of our universe have some form of sustainability disclosure. However, few … are willing to provide a direct named contact for ESG queries from stakeholders," the study stated.

"When a contact is given, it is often someone in the public relations or corporate communications office, revealing a commonly held belief in Asia that sustainability reporting is more of a marketing tool to prove a company's 'green' credentials."

Overall, 57 Korean organisations were featured, achieving the best collective total on 57%, and blazing a trail for environmental and disclosure policies.

"Leading global brands such as Samsung Electronics and Hyundai Motors potentially influence this robust reporting, often using the highest international reporting standards," CSR Asia and Responsible Research said.

"These highly visible companies have undertaken a range of initiatives in an effort to align themselves with global trends … and are likely influencing the Korean company universe to improve disclosure."

SK Telecom posted the top score on 73%, ahead of materials specialist POSCO on 72%, as Korean enterprises took first place on five of the measures tracked.

The 56 Indian companies monitored delivered a cumulative score of 43%, and assumed first position in terms of their overarching approach to issues like sustainability and energy conservation.

Among the main strengths of Indian businesses was a focus on meeting international benchmarks, although many exhibited a distinct lack of clarity concerning governance and nomination procedures.

Its booming IT sector performed particularly strongly, and housed the premier company overall, Wipro, on 83%.

While the healthcare segment displayed a poor standard, a trend observable across the region, Dr Reddy's Labs occupied second spot in India, also on 83%.

Property firms again received the lowest ratings, with Unitech on 14% and Indiabulls on 3%.

Malaysia claimed third place on a national basis, as its 20 corporations delivered figures of 42%.

China boasted the greatest number of enterprises which were subject to scrutiny, on 208, but generated a total of 10%, finishing bottom in every area except governance.

One key contributor to this result was a "widespread lack of disclosure", and the Shenzhen and Shanghai Stock Exchanges have taken steps to amend such a situation.

But the financial sector fared comparatively well, partly because the China Banking Association released sustainability guidelines last year.

Lenovo, the IT giant, led the local rankings on 77%, followed by energy group China Shenhua on 68%, while real estate operator Renrenie and consumer goods manufacturer Shanghai Baili both posted 4%.

Elsewhere, Malaysia achieved a country score of 42%, with Thailand on 40%, Singapore on 39%, Indonesia on 38%, Taiwan on 34%, Hong Kong on 33%,the Philippines on 29%.

Organisations praised for their efforts included the Taiwan Semiconductor Manufacturing Company, registering 87%, and two real estate firms from Singapore, City Developments on 84% and CapitalLand on 80%.

Hong Kong's utilities specialist CLP Holding scored 84% and airline Cathay Pacific recorded 81%, with Unilever's Indonesian arm reaching 79% and Malaysian telecoms provider Digi hitting 78%.

Data sourced from CSR Asia; additional content by Warc staff