Friday, 2 December, 2022

Sustainable reporting a must for smooth LDC graduation

  • Staff Correspondent
  • 30 October, 2022 12:00 AM
  • Print news

Sustainability reporting, a standard that publicly discloses a company's environmental, social, and governance practices, will be critical for smooth LDC graduation, says Citizen’s Platform for SDGs, Bangladesh. 

During the upcoming LDC transition, environmental compliance and labour rights are two issues that will figure prominently for Bangladesh’s overseas market access.

In Bangladesh, there is a need to have an institutional framework to promote and guide this practice for the sake of stronger and sustainable private sector growth, it said. 

The view came at the dialogue titled "Sustainability Reporting by the Private Sector in Bangladesh: Expectations and Experience" hosted by the Citizen's Platform for SDGs, Bangladesh at BRAC Centre Inn in the capital on Saturday.

It was organized in partnership with United Nations Development Program (UNDP) Bangladesh and United Nations Environment Program Poverty-Environment Action.

In his keynote, CPD researcher Towfiqul Islam Khan highlighted that sustainability reporting helps the private sector ensure that short-term profits do not turn into long-term liabilities.

The sustainability reporting can inform the policymakers as regards the state of the sectors and contribute to developing sectoral and national policies in the form of a formal and useful instrument as the country prepares itself for the LDC transition, he noted.

Khan pointed that 49 DSE listed companies (15 percent) out of 320 submitted sustainability reports in 2019, with only 11 following the standard reporting framework (3 percent).

The presentation identified several challenges in this context, including lack of awareness, dearth of capacity, absence of culture, weak corporate governance, unavailability of strong regulatory guidance and vague incentives for the private sector in Bangladesh.

The dialogue was moderated by Dr Debapriya Bhattacharya, Convenor of the Citizen’s Platform for SDGs, Bangladesh and Distinguished Fellow, Centre for Policy Dialogue (CPD).

He mentioned that sustainability reporting is significant in the process of LDC graduation and SDG. We should include a strategy paper in the LDC. “Otherwise, we can’t achieve northern values. We also should focus on relational data. Still, there is a lack of awareness in preparing sustainable reports.”

He also mentioned two types of failures: regulatory failure and market failure. We have to understand this concept more clearly for a deeper dive into sustainability. Everyone should be included in the process of achieving sustainability regarding the general masses.

Lawmaker Saber Hossain Chowdhury Chairman, of the Parliamentary Standing Committee on the ministry of environment,

forest and climate change Bangladesh said: “We should talk about the importance of sustainability reporting and how it can benefit the private sector.”

To this end, there are three motivations for the private sector: cost reduction, profitability, and increased income, he stated. 

He suggested everyone should adopt and promote sustainability not only as a process but also as a culture.

Prof Mustafizur Rahman, Distinguished Fellow, CPD recommended that companies make a business case out of it as a part of company valuation to make it more quantifiable.

Prasenjit Chakma, Assistant Resident Representative, United Nations Development Programme (UNDP) Bangladesh, said that we must figure out the regulatory status of the reporting process, whether it should be voluntary or mandatory, and measure the awareness level among the companies as well as consumers.

The role of UNDP here can be setting a regulatory standard and proposing a draft policy setting, he, emphasizing that compliance measurement is needed for market access in the future.

Asif Ibrahim, Chairman, Chittagong Stock Exchange, regretted that most Bangladeshi companies do not have the required human resource expertise or experience to prepare sustainability reports.