Asia Pacific leads adoption of sustainability reporting standards, finds ACCA

Asia Pacific is leading global adoption of sustainability reporting standards, according to research by the Association of Chartered Certified Accountants (ACCA).

The accounting body launched its “Asia Pacific builds a sustainable future” report during the 33^rd APEC Summit. It draws on interviews and roundtables with 44 finance and accountancy professionals and subject experts, as well as desktop research.

According to the report, more than 80% of ASEAN economies by GDP have adopted, or plan to adopt, standards issued by the International Sustainability Standards Board (ISSB).

ACCA said Asia Pacific economies, including Chinese mainland, that have adopted ISSB Standards on a mandatory or voluntary basis account for almost $60trn in GDP, which is around 47% of global GDP.

The report found that many companies still regard sustainability disclosure largely as a compliance exercise.

According to the report, finance functions are not yet consistently using sustainability data to assess risks, identify opportunities, or measure business value. The issue may become more pressing as assurance requirements are introduced.

The report also identified water and heat as issues that could define the century.

European Union due diligence and reporting directives could also create market-access pressures for Asia Pacific suppliers, the report found.

ACCA said regional industry collaboration would be necessary to share responsibility and avoid a ‘race to the bottom’.

The report called on boards to incorporate decarbonisation and nature-related issues into budgets and capital plans as resilience risks.

It also urged policymakers to mobilise Asian capital to reduce risk in transition projects and increase the region’s influence in global standard-setting.

ACCA chief executive Helen Brand said: “This is not a region waiting to be shown good practice, it’s building the architecture of sustainability reporting faster than anywhere else.

“But adopting a standard is not the same as achieving a strong rate of decarbonisation or addressing the other sustainability issues facing the region.

“Professional accountants are trained to ask where a number came from, who prepared it, and what interest shaped it. Those questions are now being asked of climate data, nature dependencies, labour conditions, and algorithms.

“The accountancy profession can be a major force in building a more sustainable and resilient future for Asia Pacific, and what happens here will shape what happens everywhere else.”