Abstract
The recent sustainability reporting (SR) mandate by the Singapore Exchange has heightened stakeholder awareness and propelled sustainability disclosures. Albeit encouraging, more than half of listed companies in Singapore do not produce sustainability reports. This signifies a lack of sustainability commitment, or perhaps, local companies have limited understanding on the potential value of sustainability. Our study aims to fill this gap by examining if (1) the 100 leading brands in Singapore similarly benefit from a higher brand value when they produce sustainability reports; (2) if more disclosure leads to higher brand value; (3) if a lagged effect is present. The methodology of this study included the collation of sustainability information from the 100 leading brands in Singapore, scoring each company’s sustainability performance using the Global Reporting Initiative (GRI) framework. Finally, we examine the correlations using regression analysis to compare the companies’ sustainability performance with the reputed brand rankings by Brand Finance. Our findings revealed that one-fifth of the 100 leading brands in Singapore do not engage in sustainability, despite the positive correlation between sustainability reporting and brand value. Our results also suggest that greater disclosure leads to higher brand value, yet social and environmental indicators are undermanaged. Moreover, there is a lagged effect as public perceptions take time to shape. Internalising a company’s sustainability vision through a multi-stakeholder consultative approach is critical. Brand managers and sustainability practitioners must be aware that failures to meet stakeholder expectations today may consequently impact investors’ decisions.
Highlights
The alarmingly increasing rates of climate disasters have heightened global attention and pressure on businesses to operate sustainably with a long-term generational viewpoint [1]
We aim to close this gap by first, evaluating the level of sustainability performance in Singapore; thereafter, we examine the correlation between sustainability and brand value, and if more disclosures lead to higher brand value
We have examined the quality of sustainability disclosures by 100 leading brands in Singapore using the assessment framework guided by the Global Reporting Initiative (GRI) standards
Summary
The alarmingly increasing rates of climate disasters have heightened global attention and pressure on businesses to operate sustainably with a long-term generational viewpoint [1]. Would sustainability efforts lead to brand differentiation? Academic researchers and practitioners often ask this question [2,3]. From a sustainability perspective, marketing researchers recommend for businesses to incorporate sustainability into their communication to promote brand differentiation [4]. The shifting trends in how customers perceive businesses compel changes in marketing strategies and communication [5]. Consumers are looking at how businesses address present-day threats alongside the future demands of their customers. Such change has been widely noted by academics and practitioners, as the demands of today’s consumers gravitate to sustainable products [6]
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