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Financing a sustainable future in Asia

The environmental sustainability of Asia’s biggest companies is examined in the first edition of Refinitiv’s Financing a Sustainable Future in Asia. Drawing on our ESG database, we reveal a large gap between intention and action when it comes to environmental sustainability efforts.

  1. The first edition of Refinitiv’s Financing a Sustainable Future in Asia is released ahead of the Singapore Fintech Festival, where sustainable finance will be a key theme.
  2. Out of eight markets studied in Asia for their environmental impact, Hong Kong companies performed the best overall, followed by South Korea and India.
  3. A greater proportion of Asian companies have policies on emissions, waste management, and water efficiency than those with actual targets for improvement.

In September 2015, the United Nations adopted the 2030 Agenda for Sustainable Development that includes 17 Sustainable Development Goals (SDGs). Achieving the SDGs is a collective effort that starts with the most influential members of society, including large companies, leading the way.

With Asia set to be the growth engine of the world in the coming decade, its companies are under pressure to show their sustainable leadership as regulations tighten and resources are strained by population expansion.

With sustainable finance a key theme at this year’s Singapore Fintech Festival in November, Refinitiv has launched its inaugural Financing a Sustainable Future in Asia report. In the first edition, we examine the environmental performance of Asia companies.

Financing a sustainable future in Asia report

Some of the key findings highlighted in the report include:

Companies in Hong Kong recorded the best overall performance in Asia for their environmental impact out of eight markets studied. Companies in Hong Kong had an average environment score of 70.06, followed by South Korea (64.57) and India (63.12).

Singapore’s largest companies rank second lowest in the region overall, with the average environment score at 57.02, below the regional average of 62.34 points.

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A gulf between intention and action

A clear gap is seen between intention and action. A greater proportion of Asian companies have policies on emissions, waste management, and water efficiency than those with actual targets for improvement.

In Singapore, for instance, the largest disparity is in resource and waste management, with 80 percent of companies adopting waste reduction policies, but only 28 percent having specific waste reduction targets to back up their policies.

However, targets can make a significant impact on action over time and drive real change.

Progress in the supply chain

The report also highlights that Asian companies have made considerable progress in building more ethical supply chains.

Singapore companies recorded the largest increase in organizations with supply chain policies in Asia, from 15 percent in FY2013 to 55 percent in FY2017.

However, Singaporean companies lag the region in the development of environmentally conscious products, with only 40 percent developing environmentally friendly products and services, compared with 56 percent of companies in Asia.

Biodiversity off the menu

Biodiversity refers to biological diversity, and ultimately the health of the world’s plant and animal life and habitats.

When looking at biodiversity impact, our report found that companies both in Asia and globally have been worryingly stagnant in this area, with just 24 percent of companies globally and 29 percent in Asia measuring this.

Across the region, Japanese companies are the most advanced in this area, with 40 percent measuring biodiversity impact, and Taiwan the lowest at 12 percent.

Asia’s sustainable future

With Asia set to lead global economic growth in the coming decade, the region’s companies will play a prominent role in the sustainable development agenda.

As many of the world’s most pressing environmental concerns, such as climate change, reach critical junctures, it is important that companies take their responsibilities seriously.

How is Asia measuring up on environmental sustainability? Financing a sustainable future in Asia

Key stats from Asia

Based on Refinitiv’s Environmental Pillar Scores, the regional average score for Asia is 62.34, which is slightly higher than the global average of 59.60.

    • Within Asia, companies in Hong Kong (70.06) performed the best in the region, followed by South Korea (64.57) and India (63.12).

Emissions: Sixty-nine percent of Asian companies have emissions reduction policies, which is a significant increase from 55 percent in 2013. However, Asian companies with specific emissions reduction targets remained relatively stagnant, with a slight increase from 28 percent in 2013 to 30 percent in 2017.

    • Hong Kong leads the way in Asia around adopting emissions policies, where 87 percent of organisations have emissions policies, while Japan fared the best for emissions reductions targets.
    • 53 percent of Singaporean companies have emissions policies and 33 percent have emissions reductions targets.
    • China has the largest gap between intention and action, where 77 percent of companies have emissions policies but only 8 percent have reduction targets.

Water efficiency: Sixty-two percent of the companies in Asia have a water efficiency policy, but only 16 percent maintain specific water efficiency targets.

    • Hong Kong leads the region in setting water efficiency policies at 81 percent, while China experienced the greatest growth of 44 percent increase over five years.
    • 60 percent of Singaporean companies have water efficiency policies and 18 percent maintain targets.

Ethical supply chains: Fifty-six percent of companies in Asia have supply chain policies and are committed to developing environmentally products and services.

ESG data and insights play an important role in helping to drive and influence the momentum and changes required.

To learn more about how Refinitiv is empowering sustainable decisions with ESG Data, visit our booth at the Singapore FinTech Festival, being held 11-15 November.

Using ESG data helps to place ESG thinking at the heart of your investment process

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