The global pressure for large companies to disclose their sustainability efforts is increasing. Investors are now examining green credentials before investing, and stock exchange administrators are mandating regular reporting of environmental, social, and governance (ESG) metrics. However, while transparency is vital for building trust, a Google executive believes that the demand for information should not hinder companies’ climate ambitions. Rachel Teo, who leads Google’s government affairs and public policy work in Southeast Asia and sustainability across the Asia Pacific, suggests that governments should establish interoperable frameworks to assist companies in navigating existing sustainability reporting rules. Teo emphasizes the need for a pragmatic and proportionate balance of transparency that informs investments, rather than excessive burdens on companies. Currently, there are over 600 standards, frameworks, and guidelines available for companies to report their efforts in combating climate change, protecting biodiversity, and managing sustainability risks. Teo also suggests that local exemptions for multinational companies already subject to sustainability reporting mandates overseas would help alleviate burdens and prevent data duplication. Teo shared these insights during a panel discussion on technology and trust in sustainability at the Greentech Festival conference in Singapore in November 2023.
The number of businesses obligated to report on sustainability is growing. While the majority of responsibilities currently fall on listed companies, governments are turning their attention to larger privately-held enterprises. Singapore could be among the first Asian countries to mandate climate-related disclosures for such companies by the financial year 2027, with listed companies required to provide climate disclosures as early as the financial year 2025, pending feedback on recommendations. Efforts have been made to consolidate reporting guidelines, such as the recent ISSB standard, which references several existing initiatives. However, Asian governments have also been setting their own criteria for “green” projects through financial taxonomies, differing from shared rules in regions like the European Union. Teo highlights that disclosure requirements should not discourage companies from setting ambitious climate targets through transition planning and scenario analysis. Transparency rules should hold companies accountable while encouraging ambitious goals.
Transparency is generally seen as a driver of more ambitious climate action as it fosters competition among businesses based on sustainability credentials and helps companies maintain trust among skeptical consumers. However, increased scrutiny in recent years has led to “greenhushing,” where brands downplay or underreport their green credentials to avoid scrutiny. In a 2022 corporate sustainability study, consultancy South Pole found that one in four businesses do not publicize their science-aligned climate targets. The report questioned whether increased scrutiny from the media, non-governmental organizations, and consumer and market authorities has made surveyed leaders hesitant to publicize their net-zero ambitions. Furthermore, it raised concerns about whether companies lack the technical skills and confidence to discuss complex climate efforts. Greenhushing makes targets and achievements harder to scrutinize, limits knowledge sharing, and potentially results in less ambitious targets and missed opportunities for sectors to decarbonize collaboratively.
Regarding Google’s own sustainability efforts, Teo shared that the tech company voluntarily discloses sustainability metrics, including its Scope 3 emissions, which amounted to 7.6 million tonnes of carbon dioxide equivalent in 2022. Google aims to halve its overall emissions by 2030 relative to 2019 levels and neutralize the remainder through carbon offsets. As Scope 3 emissions rely heavily on estimates and developing methodologies, Teo suggests that policymakers limit liabilities on enterprises in case of inadvertent mistakes. Teo remains optimistic about Google’s ambitious goals for the Asia Pacific region, despite the challenges faced by all industries.
During the Greentech Festival, industry players highlighted the growing opportunities to leverage data for sustainability initiatives. For example, Singapore’s ST Engineering, an aerospace engineering, defense, and technology group, has received collaboration requests from financial institutions regarding a satellite it launched that can capture multiple high-resolution visuals of equatorial areas each day. This data can help manage waste and deforestation. Google’s free mapping tool, Environmental Insights Explorer (EIE), assists governments in tracking emissions and identifying ideal locations for rooftop solar panels. The tool is used by 42,000 cities worldwide and helps local governments and communities measure and reduce emissions at the source. Google also utilizes its Active Assist tools, powered by artificial intelligence and data, to help its data storage clients identify power-intensive workloads that can be moved offline, resulting in cost savings.
Bhupinder Singh, Asia Pacific and Middle East president at telecommunications company Vodafone Business, mentioned a survey commissioned by Vodafone Business that showed 74% of Asia Pacific businesses reporting higher profits last year had a formal ESG program. This demonstrates a clear link between sustainability and financial success. Effective internal communication is crucial to inform employees about opportunities to support green initiatives within businesses. Teo added that sustainability needs to be integrated into every company function, including human resources and policy.
