Since the pandemic has raised the need for businesses to address complex supply chains and become more transparent, the growing focus now is on how businesses are responding to the pandemic. — Bernama photo
KUCHING: Reporting historical environment, social and governance (ESG) data and performance remains essential for businesses amid the Covid-19 pandemic.
According to AmBank Research, the pandemic has amplified the demand for companies to address complex supply chains and become more transparent.
“And the growing focus now is on how businesses are responding to this pandemic,” the research firm said in a special report on the matter.
“There are growing environmental, political and social pressures for the world to find a more sustainable and responsible path towards development,” it added.
“Organisations are expected not only to apply socially responsible practices but also to become responsible business leaders.
“More organisations are expected to establish and operate ethical value chains and run their processes with integrity.
“In short, it is all about bringing renewed attention to the importance of corporate transparency on sustainability issues.”
Since the pandemic has raised the need for businesses to address complex supply chains and become more transparent, AmBank Research highlighted that the growing focus now is on how businesses are responding to the pandemic.
It further highlighted that the emphasis is on board composition and quality, environmental risks and opportunities, corporate strategy and capital allocation, compensation that promotes long-term growth, and human capital management.
“In short, it is all about bringing renewed attention to the importance of corporate transparency on sustainability issues.
“It is time to relook at business models. The model should focus on “sustainability” which then looks at resilience, reforms and reimagination.”
AmBank Research noted that there is a need for companies to understand how they are responding now and how they should respond in the future.
The research firm also noted that here, there is a need for consistency and completeness besides accountability. Such focus will help provide sustainability against shocks.
“While managing Covid-19’s immediate impacts will be the top priority for businesses, reporting historical ESG data and performance remains essential.
“A slight delay of this year’s reporting is understandable, yet businesses must still strive for the same level of coverage as previous years and continue to improve their disclosures, moving forward, with the aim of ensuring their performance on key social issues are even more thoroughly examined than usual.
“Besides, accountability is vital in this new reality. Reports should provide sustaining account as to how businesses are responding to the pandemic.
“The degree to which companies do this now or in the future will depend on which part they are in their reporting cycle.”
The research firm noted that regardless of which cycle they are in, businesses need to explain decisions made during this time and make forward-looking statements about how they intend to help “build back better” in the future.
“Numbers must be backed by narratives. The reduction in business operations and travel due to the pandemic virus will likely reduce greenhouse gas emissions and other environmental impacts.”
It said that similarly, Covid-19 will impact many other metrics such as diversity, employee engagement and supply chain labour compliance.
“Going forward, it will be essential for businesses to provide a narrative that identifies what change in historical performance relates to Covid-19 factors and what change results from previously existing plans – numbers on their own will be impossible for readers to interpret.
“It will also be important to provide a forward-looking narrative explaining their potential trajectory once Covid-19 is behind us.
“While reputation is an important driver of focus, business continuity, economic inclusion and public safety considerations are also critical.
“Given the growing attention across the board from investors to media, companies will need to increasingly focus on social issues to demonstrate their responsiveness to the top priorities of the day.
“Collaborations with industry peers to ensure comparable Covid-19 disclosures is vital.”