Nature-related disclosure among Asia-Pacific companies remains nascent, with only 13% of 700 listed companies (listcos) in the region having disclosed their alignment with the Taskforce on Nature-related Financial Disclosures (TNFD) framework.
The inaugural study on nature-related reporting and climate transition plans by luxury group Kering and the Centre for Governance and Sustainability (CGS) at the National University of Singapore (NUS) Business School reveals “significant gaps” in nature-related reporting and low adoption of TNFD among companies in the region, according to a Jan 13 announcement.
The study, which analysed 700 listcos across 11 industries and 14 Asia-Pacific jurisdictions, focused on four key pillars: governance, strategy, risk and impact management, and metrics and targets.
It found that while 72% identified topics such as water, biodiversity and ecosystem protection in their sustainability or annual reports, only 25% considered nature-related issues material to their businesses.
Among the companies that made nature-related disclosures, Australia took the lead with 68% considered nature as material. This is followed by New Zealand (48%) and Singapore and Malaysia (both 42%). South Korea ranked the lowest at 18%.
In the governance pillar, approximately 50% disclosed the role of their board and management in overseeing nature-related issues, signalling growing attention at the board and management level.
See also: Kering, NUS CGS partner to develop nature, climate transition studies over three years
Across the strategy pillar, 75% acknowledged the impact of nature-related issues on their business strategies and 49% identified their effects on financial planning. However, only 25% of companies planned their strategy resilience in adapting different nature-related scenarios.
Even fewer companies — only 9% — mentioned capital flows and financing opportunities, highlighting the need for greater capital allocation to address nature-related concerns.
Under the risk and impact management pillar, only 39% of the companies have integrated nature-related concerns into their overall risk management frameworks. But CGS and Kering say this trend is expected to grow as companies increasingly recognise the value of addressing such challenges to enhance their risk management practices.
See also: Singapore’s three banks to remain in climate alliance despite US peers’ exit
Notably, Singapore has the largest share (66%) of companies incorporating nature-related issues into their risk management practices, setting a benchmark in the region.
Less than 40% of assessed listcos disclosed metrics for managing nature-related issues, and only 30% set specific targets in the metrics and targets pillar, reflecting gaps in accountability and oversight. “These findings underscore the need for more comprehensive and actionable nature-related reporting to align with global standards and drive meaningful progress,” say Kering and CGS.
Early stages of TNFD
The study found that only 13% of the 700 listcos have disclosed their alignment with the TNFD framework, a comprehensive standard for nature-related reporting. This highlights that adoption “remains in its early stages” since the framework was introduced in 2023, say Kering and CGS. “As companies continue to evaluate nature-related issues, develop strategies, and gather necessary data, progress toward broader adoption is expected over time.”
Marie-Claire Daveu, chief sustainability and institutional affairs officer at Kering, says voluntary actions “won’t be enough” to halt and reverse nature loss by 2030. “Like the work initiated for climate change, it is now imperative that nature-related issues are embedded into companies’ strategies for the long run; it is imperative for nature policies to be ambitious and progressive enough.”
Kering is a French multinational holding company that owns the brands Yves Saint Laurent, Gucci, Balenciaga, Bottega Veneta and Alexander McQueen, among others. The luxury group announced in May 2024 a three-year research collaboration with CGS.
Together, they will develop a first-of-its-kind baseline for measuring the impact of climate and nature-related transition strategies adopted by corporations across Asia-Pacific over three phases. The first and third studies will focus on nature-related issues, while the second study will concentrate on climate transition.
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A preview of this study, titled Nature-Related Practices and Strategies in Asia-Pacific, was first released in May 2024 along with news of the collaboration. CGS released the study in full at its Business Action for Nature workshop on Jan 14, which featured speakers Esther An and Eric Lim, the chief sustainability officers of City Developments Limited and United Overseas Bank respectively.
The information reviewed in this study was based on the latest sustainability reports and annual reports available as at February 2024. This study assessed the nature-related practices and disclosures of the top 50 listed companies by market capitalisation across Australia, mainland China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. Only reports in English were included in this study.
Professor Lawrence Loh, director of CGS, says: “While there is growing recognition of nature-related issues in corporate sustainability strategies across Asia-Pacific, nature remains a nascent issue compared to climate. However, as climate reporting matures, integrating nature-related considerations into these frameworks is crucial for a comprehensive understanding of environmental risks.”
