Strong net zero commitment among Asia Pacific companies with improved GHG emissions disclosures: PwC and NUS Business School

• Of the 700 companies studied: 53% (371 companies) have set net zero commitments, up from 47% (329 companies) from last year’s report.

• 37% of these 371 companies with net zero targets have described their targets as science-based, but only 18% have had their net zero targets verified by the Science Based Target initiative (SBTi).

• 63% of 650 companies1 disclosed Scope 3 emissions, up from 50% of 700 companies from last year’s report; however, most offered minimal category2  breakdowns 

• Of the 638 companies that described their approach to materiality, 51% stated that they adopted the double materiality approach – a concept that combines both impact materiality and financial materiality.

• While close to half of the 357 companies, which carried out climate scenario analysis, disclosed both quantitative and qualitative scenarios (at 45%), a similar proportion (46%) have disclosed only qualitative climate scenarios, suggesting that quantifying climate-related risk remains a work in progress.

• 62% have included sections on nature and biodiversity, although only 7% referred to the Taskforce for Nature-related Financial Disclosure (TNFD) framework for their nature and biodiversity reporting.

Jakarta, 8 May 2025 – The third edition of the study, Sustainability Counts III: Sustainability Reporting in Asia Pacific, released by PwC Singapore and the Centre for Governance and Sustainability (CGS) at the National University of Singapore (NUS) Business School, revealed both progress and challenges in the region's sustainability reporting. While more Asia Pacific companies have set net zero targets, only 18% underpin these ambitions with targets verified by the Science-Based Target initiative (SBTi)3. The SBTi is in the process of reviewing the Corporate Net-Zero Standard, and similarly, the GHG Protocol has conducted surveys to inform the scope of updates for its standards and guidance. The study also found an increase in the disclosure of Scope 3 emissions4, though greater room for more information on relevant Scope 3 emissions categories remains. With global attention on climate action, the study – which reviewed the reports of the top 50 listed companies across 14 Asia Pacific jurisdictions5 – sheds light on the state of sustainability reporting in the region. 

Professor Lawrence Loh, Director, Centre for Governance and Sustainability at NUS Business School, said, “While Asia Pacific companies have made significant strides in sustainability reporting, particularly with the notable growth in Scope 3 emissions disclosure, substantial gaps remain in verification and transparency. Few companies have validated their net-zero targets through the Science-Based Targets initiative, emphasising an urgent need for greater accountability. Echoing COP29's emphasis on urgent climate action, our findings highlight the critical need for robust governance frameworks and actionable climate strategies to drive sustainable development across the Asia Pacific.” 

Companies applying double materiality lens

This year’s study further examines the materiality assessment approach, whether it is impact materiality, financial materiality or double materiality. Yuliana Sudjonno, PwC Indonesia Partner and Sustainability Leader, said, “A materiality assessment is a crucial part of sustainability reporting, aiding organisations in identifying and prioritising the most significant ESG issues for their business and stakeholders. By understanding and applying these concepts, organisations can create more robust and meaningful sustainability reports. This approach helps them manage risks, seize opportunities, and demonstrate their commitment to sustainable development by considering both external impacts and internal financial implications of ESG issues.” 

Understanding impact and financial materiality provides a broader picture of what the company is facing, how and when those issues will affect the company's performance, and the costs associated with reaching the target. This process helps companies allocate their resources to tackle the most important items they are facing, understand the timeframe of when the issues will be material for the company, and measure the extent of mitigation actions by understanding the cost and benefit implications to financial performance.

51% of companies stated that they adopted the double materiality approach – a concept that combines both impact materiality and financial materiality - followed by the impact materiality approach (18%), indicating that companies not only focus on their financial viability but also their impact on the society and environment. For Indonesian context, most listed companies in Indonesia adopted the impact materiality approach (51%), however, 10% of Indonesia-listed companies did not disclose any of the selection processes or reasons.

Companies built more “muscles” in identifying climate-related risks and opportunities, but quantification of such risks remains underway

Across Asia Pacific, 81% of 6506 companies studied have disclosed their process for managing climate-related risks and/or opportunities, an increase from 74% of 700 companies from last year’s report. Furthermore, out of 13 jurisdictions, nine have seen an increase in disclosures of the process for managing climate-related risks and opportunities compared to last year’s report.

While there’s a growing demand for companies to quantify the impacts of potential climate scenarios - in addition to providing qualitative analysis – the report found that nearly half (45%) of 650 companies that carried out climate scenario analysis have disclosed both quantitative and qualitative scenarios. Meanwhile, a similar half (46%) have disclosed only qualitative scenario analysis. This is indicative that developing and disclosing a quantitative scenario analysis presents several challenges, including a lack of accurate and comprehensive data on climate impacts, emissions, and financial metrics, which may be difficult to obtain.

Nature and biodiversity reporting making healthy appearance, but TNFD framework application remains at the nascent stage

Nature and biodiversity issues are increasingly important as part of an organisation’s non-financial disclosures, especially as the link between nature and climate becomes better understood.  Yuliana said, “Across Asia Pacific, over half (62%) of companies studied have included sections on nature and biodiversity in their sustainability reports. Notably, listed companies in Japan (94%), Indonesia (92%), and South Korea (86%) had the top three highest disclosure rates on nature and biodiversity issues. However, only 7% of companies disclosed that they currently refer to the TNFD framework for their nature and biodiversity reporting, while 11% plan to align with it in the future.”

Progress in disclosure of Scope 3 emissions despite complexities

The study reveals an increase in the disclosure rate for Scope 1 and Scope 2 emissions, which has risen from 80% of 700 companies in the previous year to 88% of 650 companies7 this year for both areas. Although the disclosure rate for Scope 3 emissions remains lower, it has shown notable improvement, climbing from 50% to 63%8. Despite these advancements, many companies still focus on disclosing their Scope 3 emissions in less complex areas, such as business travel. 

Progress in boards’ responsibility and sustainability performance-linked remuneration disclosures

The study highlights continued improvements in sustainability reporting, with 86% of companies now disclosing the boards’ responsibility for sustainability, reflecting increased governance as jurisdictions mandate climate-related disclosures. Furthermore, 42% of companies have tied executive remuneration to sustainability performance or targets, up from 33% from last year’s report, showing stronger alignment of leadership incentives with sustainability goals. However, only 6% of companies have disclosed a specific percentage of remuneration linked to climate performance or targets, falling short of recommendations under IFRS S2 Climate-related Disclosures. 

Disclosing how a company links remuneration to sustainability and climate-related performance fosters transparency, accountability, and alignment of interests. It builds trust with stakeholders, improves performance, and supports long-term value and sustainability objectives. This also enhances risk management and business resilience against climate change. Specifying the percentage of remuneration tied to sustainability provides measurable progress and motivates leadership and employees. Regulators may gradually require disclosure of specific percentages as well, based on IFRS S2.

Stakeholder demand driving up sustainability assurance

The demand for reliable sustainability information, such as from investors, has led to an increase in external assurance of sustainability reports. The study shows that 60% of companies sought external assurance, up from 49% from last year’s report, despite assurance regulations only commencing in later years. However, 78% of companies with external assurance have only sought limited or moderate assurance, indicating room for improvement in the robustness of assurance practices. As investors seek greater clarity and consistency, more jurisdictions are considering or mandating assurance over sustainability information, with plans to progress towards reasonable assurance.