Stakeholder theory is a governance and management approach that recognises a company’s responsibility to a wider group of stakeholders, not just shareholders. These stakeholders may include employees, customers, suppliers, communities, regulators, investors, and business partners. For businesses in Singapore, this is especially relevant as sustainability reporting and climate-related disclosures become increasingly structured.

Sustainability reporting is moving into a more mature phase. Investors now emphasise comparable information on sustainability-related risks and opportunities, while regulators, customers, employees and communities increasingly expect organisations to explain their wider economic, environmental and social impacts. The collaboration between the Global Reporting Initiative (GRI) and the International Sustainability Standards Board (ISSB) marks an important step towards a more coherent global sustainability reporting landscape.

Sustainability reporting has become an important part of how businesses communicate their impact, governance, and long-term responsibility. The Global Reporting Initiative (GRI) Universal Standards play an important role here. They apply to every organisation using the GRI framework, regardless of size, industry, or location, and set the baseline for reporting in accordance with the GRI Standards. The revised Universal Standards, published in 2021 and effective for reporting from 1 January 2023, include GRI 1: Foundation 2021, GRI 2: General Disclosures 2021, and GRI 3: Material Topics 2021.

Environmental, social, and governance (ESG) matters are no longer peripheral issues for businesses. As scrutiny increases, boards are expected to show clearer responsibility for how ESG matters are identified, managed, monitored, and reported. This makes board-level ESG oversight essential to credible and accountable governance. When the board takes an active role, ESG becomes part of how the organisation manages risk, protects long-term value, and builds stakeholder trust.

In ESG reporting, internal controls provide structure around how information is gathered, reviewed, validated, and documented. They help organisations move away from informal judgement and towards a more consistent, evidence-based approach to identifying material ESG topics. A well-controlled materiality assessment supports a stronger ESG report by demonstrating that the organisation selected topics through a disciplined, defensible process.