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Bangladesh ranked one of the lowest in sustainability reporting in 2019 among the South Asian publicly listed companies (PLCs), according to a latest research findings.
Only 49 companies out of 320 listed on the Dhaka Stock Exchange, or 15 per cent, submitted the sustainability reports in 2019, according to the findings released at a policy dialogue in the capital on Saturday.
The research titled "Sustainability Reporting by the Private Sector in Bangladesh Expectations and Experience" was conducted following the Global Reporting Initiative (GRI), an international independent standard organisation, guidelines by Citizen's Platform for SDGs, Bangladesh.
However, only 3.0-11 per cent of the PLCs reported have followed the GRI reporting framework.
Bangladesh ranked 116th out of 137 in the Private institutions sub-index in 2018, with a value of 3.6 (out of 7)
Sustainability reporting is a standard, either voluntary or sometimes mandatory, of business practices which publicly disclose a company or organisation's economic, social, environmental, and governance practices to internal as well as external stakeholders.
Speakers at the dialogue said sustainable reporting can prepare the private sector for smooth graduation during the upcoming LDC transition.
They said sustainable reporting can ensure environmental compliance and labour rights that will figure prominently for Bangladesh's overseas market access.
In Bangladesh, the speakers said that 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.
Citizen's Platform for SDGs, Bangladesh in partnership with United Nations Development Programme (UNDP) Bangladesh and United Nations Environment Programme Poverty-Environment Action organised the policy dialogue.
Towfiqul Islam Khan, Senior Research Fellow of the Centre for Policy Dialogue (CPD) delivered the keynote presentation.
He highlighted that sustainability reporting helps the private sector ensure the kind of short-term profits which do not turn into long-term liabilities.
He said there have been limited efforts to collate the sustainability reports prepared by the private sector because of sustainable development goals (SDGs) and review them under a single framework.
"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 said.
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.
Mr Khan recommended a gradual move toward mandating sustainability reporting from the present practice of voluntary measures.
Moderating the dialogue, Dr Debapriya Bhattacharya, Convenor of the Citizen's Platform for SDGs, Bangladesh and Distinguished Fellow of the CPD, mentioned that sustainability reporting is significant in the process of LDC graduation and SDGs, and stressed on including a strategy paper in the LDC.
"We also should focus on relational data. Still, there is a lack of awareness in preparing sustainability reports," he said, pointing out two types of failure of the country - regulatory failure and market failure. "We've to understand this concept more clearly for a deeper dive into sustainability."
Saber Hossain Chowdhury, Chairman of the Parliamentary Standing Committee on the Ministry of Environment, Forest and Climate Change, was present at the dialogue as Chief Guest.
He said that there should be talks on 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 said, adding that the process should start from the micro-level industry, and that is the key.
Professor Mustafizur Rahman, Distinguished Fellow of the CPD recommended that companies make a business case out of it as a part of company valuation to make it more quantifiable.
Amitabh Chakraborty, Additional Director of Sustainable Finance Department of Bangladesh Bank, said that Bangladesh Bank has been emphasising on sustainability since 2008.
"Though Bangladesh Bank has promoted sustainability reporting, no formal regulation is currently in place," he said.
Prasenjit Chakma, Assistant Resident Representative of United Nations Development Programme (UNDP) Bangladesh, said the government must figure out the regulatory status of the reporting process, to examine whether it should be voluntary or mandatory, and measure the awareness level among the companies as well as consumers.
Asif Ibrahim, Chairman of Chittagong Stock Exchange, regretted that most Bangladeshi companies do not have the required human resource expertise or experience to prepare sustainability reports.
Prominent business leaders contributed to the dialogue, including Kamran T. Rahman, Senior Vice President, of the Metropolitan Chamber of Commerce and Industry (MCCI), Mr Fazlul Haque, Former President of BKMEA, Shams Mahmud, Former President, Dhaka Chamber of Commerce and Industry (DCCI), Zaved Akhtar, CEO of Unilever Bangladesh Ltd., Ferdaus Ara Begum, Chief Executive Officer of Business Initiative Leading Development (BUILD), Mr Lutfar Parvez, Director of Supply Chain Operations at American & Efird (Bangladesh) Ltd.
Among other experts, Dr M Abu Eusuf, Executive Director of RAPID and Professor at the Department of Development Studies, University of Dhaka, Ms Sharmind Neelormi, Associate Professor at the Department of Economics, Jahangirnagar University, Mr Farkrul Ahsan, Chief Technical Advisor at the Strengthening Institutional Capacity for SDGs Achievement in Bangladesh (SC4SDG), UNDP and Mr Raquibul Amin, Country Representative of the International Union for Conservation of Nature (IUCN) were also present.