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Accounting for Sustainability in Asia: Stock Market Regulation and Reporting in Hong Kong and Singapore

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  • Felicia H. M. Liu
  • David Demeritt
  • Samuel Tang

Abstract

Sustainability reporting nudges firms into behaving more sustainably by forcing them to account publicly for their wider social and environmental performance. This libertarian paternalist approach to governance through disclosure rather than command-and-control regulation is well established in Anglo-Saxon jurisdictions but comparatively untested in the emerging markets of Asia, where different state traditions and forms of business organization raise questions about its transferability and effectiveness. This article contributes to research on corporate social responsibility, neoliberal environmental governance, and Asian varieties of capitalism by providing the first comparative analysis of the origins, design, and initial impact of new sustainability reporting requirements on the stock markets of Hong Kong and Singapore. In mandating sustainability reporting, both exchanges were similarly concerned with following international norms and competitors but differed in the style and granularity of their company disclosure requirements. These policy design choices reflected different developmental state traditions and the different audiences that market regulators in Hong Kong and Singapore sought to influence through these public accounts. Notwithstanding substantial differences between Hong Kong’s rules-based and Singapore’s principles-based approach to reporting, the response in both markets was remarkably similar. In both cases, sustainability reporting was largely ignored by local market players who dismissed it as a foreign practice of interest to only a small number of Western institutional investors and providing little incentive to go beyond tick box compliance. These findings raise questions about the effectiveness of disclosure requirements at nudging Asian businesses toward sustainability.

Suggested Citation

  • Felicia H. M. Liu & David Demeritt & Samuel Tang, 2019. "Accounting for Sustainability in Asia: Stock Market Regulation and Reporting in Hong Kong and Singapore," Economic Geography, Taylor & Francis Journals, vol. 95(4), pages 362-384, August.
  • Handle: RePEc:taf:recgxx:v:95:y:2019:i:4:p:362-384
    DOI: 10.1080/00130095.2018.1544461
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    Cited by:

    1. Nurul Jannah Mustafa Khan & Hasani Mohd Ali, 2023. "Regulations on Non-Financial Disclosure in Corporate Reporting: A Thematic Review," Sustainability, MDPI, vol. 15(3), pages 1-23, February.
    2. Chun Cai & Saddam A. Hazaea & Mohammed Hael & Ebrahim Mohammed Al-Matari & Adeeb Alhebri & Abdulmajeed Mawhan H. Alfadhli, 2024. "Mapping the Landscape of the Literature on Environmental, Social, Governance Disclosure and Firm Value: A Bibliometric Analysis and Systematic Review," Sustainability, MDPI, vol. 16(10), pages 1-34, May.
    3. Eugene Kang & Nguyen Bao Lam, 2023. "The impact of environmental disclosure on initial public offering underpricing: Sustainable development in Singapore," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 119-133, January.

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