Sustainability Reporting For Malaysian SME
Several top-listed companies in Asia are carrying out sustainability reporting, but these companies or organizations still have a long way to go when it comes to enhancing the quality of their reports. Sustainability reporting comes with several benefits. With sustainability reporting, companies can now consider the impact they have on an extensive array of sustainability issues.This helps them to have a clearer insight of the dangers and opportunities they encounter.
The term sustainability reporting is seen as the ideal initiative for imparting sustainability performance and effects. A sustainability report shouldn’t be seen as a complicated document; this report is simply about the environmental and social performance of a company or an organization. A sustainability report is very significant, thus it’s recommended that all organization prepares one. Internationally, there are calls for organizations to enhance their sustainability practices and reporting.
Is Sustainability Reporting Mandatory?
In some countries, sustainability reporting is mandatory. In Malaysia, for instance, this report is currently mandatory for listed issuers. It, however, offers organizations a wide array of benefits. A sustainability report is also beneficial to SME, and most SMEs in Malaysia adopt it to measure, grasp, and discuss their economical, social, governance performance, and then set aims, and handle change in an effective way.
Accounting firms in Malaysia aren’t left out as well; they also embrace sustainability reporting which helps improve their accounting services in Malaysia and also help them to provide real and genuine proof of their sustainability level.
As several firms have accepted sustainability reporting, the most used framework has been the Global Reporting Initiative (GRI) sustainability reporting framework. This term is very similar to various terms for non-financial reporting, corporate social responsibility (CSR) reporting, and triple bottom line reporting. Breeding trust in governments and businesses as well as maintaining the reputation, it is significant to accomplish a sustainable economy.
Each day, several decisions are made; these decisions always have a direct effect on their stakeholders, like civil society, financial institutes, labor organizations, and how much they trust them. These decisions aren’t only based on just financial details; they are also based on an appraisal of various dangers and opportunities by adopting information on several current and future problems.
However, there is a rising trend around the world to regard SMEs as a congregated group when considering sustainability issues. SMEs in Malaysia aren’t left out in this latest trend. Although, having this consideration should be regarded as one of the most significant issues in the business world of today, managements of most SMEs are not aware of the significance of sustainability reporting to business activities in the recent economic world.
What Should a Sustainability Report Contain?
Sustainability reporting for Malaysia SMEs comes with lots of benefits which are highlighted below:
- High comprehension of several businesses risks and opportunities
- Emphasizing the connection between financial performance and non-financial performance
- Affecting business plans, including long-term management techniques
- Comparing achievements internally, and between companies and other sectors
- Preventing issues like being implicated in publicized environmental, and governance failures
- Streamlining several procedures, mitigating costs and enhancing efficiency
- High comprehension of several businesses risks and opportunities
- Emphasizing the connection between financial performance and non-financial performance
- Affecting business plans, including long-term management techniques
- Comparing achievements internally, and between companies and other sectors
- Preventing issues like being implicated in publicized environmental, and governance failures
- Streamlining several procedures, mitigating costs and enhancing efficiency
Examples of sustainability reports:
- Reducing the negative impact of environmental, social and governance activities, as well as enhancing reputation and loyalty of brands
- Making external stakeholders grasp the genuine value of the organization, including real and unreal assets.
- Proving how organizations control, and are controlled by expectations regarding sustainable growth
In a Nutshell
In fact, it’s advisable for all businesses to have sustainability reporting, which comes with several benefits, such as allowing a company to stay away from danger and be responsive to any oncoming opportunities.
To find out more about sustainability reporting, please feel free to get in touch with us.
