ACCA urges CFOs to elevate sustainability for business resilience
Finance leaders across Asia Pacific are being asked to rethink how they use sustainability information. According to the Association of Chartered Certified Accountants, environmental and social data should shape decisions about risk, capital and long-term resilience. However, many organisations still treat sustainability reporting as a compliance task rather than a strategic tool.
The message comes from a new ACCA report aimed at chief financial officers. It argues that reporting requirements alone will not build resilient businesses. Instead, finance teams need to connect sustainability commitments with budgets, investment decisions and risk management. The shift matters because CFOs control many of the mechanisms through which environmental risks become financially material.
Across the region, sustainability reporting standards are being adopted rapidly. More than 80% of ASEAN economies by GDP have either adopted or announced plans to adopt International Sustainability Standards Board guidance. Economies in Asia Pacific that have mandated or voluntarily adopted ISSB standards represent nearly US$60 trillion in GDP, roughly 47% of the global total.
Despite this progress, finance functions are often not yet converting sustainability data into assessments of risk, opportunity or future cash flow. Many companies focus on producing only the minimum information required to satisfy regulators. Early adopters that began reporting voluntarily, by contrast, are more likely to use sustainability information in strategy, capital expenditure and risk registers.
How the ACCA research was conducted
The report, titled Asia Pacific builds a sustainable future, drew on desktop research, earlier ACCA studies, interviews and roundtable discussions. It involved 44 finance and accountancy professionals, alongside experts in decarbonisation, energy transition, nature, human rights, business and artificial intelligence.
Participants came from Australia and ASEAN countries. Several themes emerged consistently. Compliance remains the dominant mindset. Finance and sustainability teams often operate separately, with limited knowledge sharing or cooperation. ISSB alignment is broadly welcomed because it reduces fragmentation and provides a recognised basis for reporting.
Early adopters gained strategic benefits by embedding sustainability information in governance, information systems and board awareness. These organisations invested sooner in the capabilities needed to make reporting reliable and useful. Companies that waited until mandatory deadlines approached often produced disclosures without the underlying systems, controls or risk processes to support them.
One participant described the problem clearly. Climate reporting needs to be reframed as a question of business resilience, future cash flows and balance sheet viability, not as environmental advocacy or a standalone disclosure exercise. Another criticised the continued focus on minimum compliance, saying some CFOs still see sustainability as another thing to do rather than a strategic business driver.
Finance teams operate separately from sustainability functions
The research identified a capability and ownership gap. Finance teams often lack knowledge of sustainability issues, while sustainability teams may not understand how to translate environmental data into financial terms. This separation means that valuable information is not reaching the people who make decisions about capital allocation, forecasting and risk management.
CFOs are well placed to close this gap. They control budgets, investment cases, capital expenditure, forecasting, risk registers, internal controls and external reporting. That position allows them to connect sustainability commitments with operational decisions. For example, a decarbonisation programme may reduce emissions while also lowering exposure to fossil fuel price volatility, energy cost increases and supply disruptions.
Sharath Martin, ACCA Asia Pacific senior policy consultant, emphasised that this is not about disclosures for their own sake. Instead, it is about making businesses more resilient. The capability gap will not close automatically, and CFOs need to lead a deliberate shift in organisational thinking.
ACCA, the International Federation of Accountants and PwC published related research in 2023. Based on a survey of 1,000 senior finance professionals worldwide, the study found that 46% of respondents had not yet produced a plan to reduce carbon emissions. Nearly 70% of respondents without an emissions plan said they had no current intention of developing one.
That research concluded that finance teams can accelerate transition planning by embedding climate priorities into business planning, resource allocation and performance measurement. It also highlighted the need to build finance professionals' technical skills in sustainability and climate-related analysis.
Assigning clear accountability for sustainability disclosures
ACCA recommends that boards assign clear accountability for the quality of sustainability-related financial disclosures. Responsibilities should be defined explicitly across finance, sustainability, risk and operational teams. Without this clarity, important tasks may be duplicated, overlooked or left to teams that lack the necessary expertise.
A detailed responsibility-assignment matrix can help. Commonly known as a RACI chart, this framework clarifies who is responsible for preparing information, who is accountable for its quality, who must be consulted and who should be informed. ACCA says such a framework improves communication and oversight, particularly where responsibilities are delegated across departments.
Companies entering future phases of sustainability-reporting implementation should begin preparing now. Waiting until mandatory reporting deadlines approach may produce disclosures, but without the governance, data systems, risk processes and measurement capabilities needed to make those disclosures reliable and useful. ACCA warns that disclosure for its own sake may ease short-term reporting pressure while leaving companies less prepared for future risks, regulation and customer demands.
Stronger governance also means ensuring that sustainability information is subject to the same controls and quality standards as financial reporting. This includes materiality assessments, internal controls, audit trails and oversight by qualified finance professionals. Without these disciplines, sustainability disclosures may lack credibility with investors, lenders and regulators.
Climate resilience planning remains weak across the region
The need for stronger finance-led resilience planning is reinforced by separate ACCA research published in 2024. Titled Weathering the storm: Building resilience against climate disruptions, the report surveyed more than 600 finance professionals through ACCA's Global Economic Conditions Survey. It found that only 20% of organisations identified climate-related risks across their operations.
Other findings were equally concerning. Only 17% regularly rehearsed their response to major disruptions. One quarter of respondents had no mechanisms in place to build climate resilience. Two thirds were not investing adequately to address physical climate risks, and only 37% planned to increase spending in this area.
Business continuity plans were the most common resilience mechanism, used by 58% of respondents. However, only 20% reported using horizon scanning to identify climate risks across locations. Just 17% used scenario testing. These gaps suggest that many organisations are not prepared for the physical impacts of climate change on their operations, supply chains or assets.
The research identifies operational continuity and long-term organisational survival as leading motivations for resilience planning. Regulatory requirements, technological change, employee safety and customer expectations were also cited as important drivers. Consequently, sustainability reporting and resilience planning cannot be separated. Reliable climate and nature-related information is necessary to identify where facilities, supply chains, assets and markets may be vulnerable.
Water, heat and flooding pose defining risks this century
The report places particular emphasis on water and heat, which it identifies as potentially defining risks for the century. Unaddressed water and heat stress could reduce GDP by 8% by 2050 in high-income countries, according to estimates cited in the research. In lower-income countries, the reduction could reach 10% to 15%.
Flooding is another major concern for the region. More than half of the 7.2 billion people affected by disasters in Asia Pacific between 1970 and 2024 were affected by floods, according to figures from the United Nations Economic and Social Commission for Asia and the Pacific. These pressures can affect more than emissions performance.
For companies, physical climate risks may influence insurance availability, asset values, financing costs, production continuity, commodity prices, labour conditions and access to water and energy. CFOs therefore have a role in ensuring that such issues are reflected in scenario analysis, investment decisions and assessments of long-term viability. The report also calls for greater mobilisation of Asian capital to reduce risks in transition projects.
It notes that only three of the ISSB Foundation's 12 board members are from Asia Pacific, and none is from ASEAN. This highlights a regional representation gap in global standard-setting. Stronger regional voices could help ensure that reporting standards reflect the specific risks and opportunities facing businesses in Asia Pacific.
What UK businesses should consider
Although the ACCA report focuses on Asia Pacific, its findings are relevant to UK businesses. Many operate in the region through subsidiaries, joint ventures or supply chains. Consequently, climate risks affecting operations in Asia Pacific can flow through to UK balance sheets, cash flows and investor expectations.
Moreover, the issues raised in the report apply equally to UK companies. Finance teams in the UK also face the challenge of integrating sustainability information into capital allocation, risk management and strategic planning. The UK has adopted its own sustainability disclosure requirements under the government's Sustainability Disclosure Requirements, which align with ISSB standards. Companies in scope must report climate-related information in their annual reports.
For UK SMEs, the implications are broader. Public sector procurement increasingly requires suppliers to demonstrate carbon reporting and net zero progress. Procurement Policy Note 06/21, known as PPN 06/21, requires suppliers bidding for central government contracts above £5 million to publish a carbon reduction plan. Larger customers and supply chain partners are also asking for sustainability information as part of tender processes and supplier due diligence.
Therefore, treating sustainability reporting as a compliance exercise may satisfy immediate regulatory requirements. However, it will not build the capabilities needed to respond to physical climate risks, supply chain disruptions, changing customer expectations or future regulation. UK businesses that integrate sustainability information into decision-making are better positioned to identify risks early, allocate capital more effectively and respond to emerging opportunities.
Key facts from the ACCA research
- More than 80% of ASEAN economies by GDP have adopted or announced plans to adopt ISSB sustainability reporting standards.
- Economies in Asia Pacific that have mandated or voluntarily adopted ISSB standards represent nearly US$60 trillion in GDP, roughly 47% of the global total.
- Only 20% of organisations surveyed by ACCA identified climate-related risks across their operations.
- Only 17% of organisations regularly rehearsed their response to major climate disruptions, while one quarter had no resilience mechanisms in place.
- Two thirds of organisations were not investing adequately to address physical climate risks, and only 37% planned to increase spending in this area.
- 46% of senior finance professionals surveyed in 2023 had not yet produced a plan to reduce carbon emissions, and nearly 70% of those without a plan had no intention of developing one.
- Unaddressed water and heat stress could reduce GDP by 8% by 2050 in high-income countries and by 10% to 15% in lower-income countries.
Connecting sustainability information with financial decisions
The transition from compliance-focused reporting to strategic use of sustainability information will not be straightforward. Climate scenarios often involve uncertainty and cannot be validated with the same precision as conventional financial statements. Some CFOs may be uncomfortable with scenarios involving severe warming or questions about going-concern assumptions.
Nevertheless, uncertainty does not eliminate the need for analysis. It makes governance, assumptions, sensitivity testing and transparent communication more important. Finance teams need to develop the skills and systems to assess climate and nature-related risks using the same rigour they apply to financial risks. This includes identifying material risks, quantifying potential impacts, testing assumptions and communicating uncertainties clearly to boards and investors.
For boards, sustainability should be integrated into oversight of strategy, risk, capital allocation and financial reporting. For CFOs, the task is to connect non-financial information with familiar financial disciplines such as materiality assessments, controls, forecasting, scenario analysis and investment appraisal. For investors and lenders, better-connected information can improve the assessment of transition risk, physical climate exposure and the durability of future cash flows.
For companies, the benefits may include earlier identification of supply chain vulnerabilities, more disciplined allocation of capital and stronger readiness for changing regulation and customer requirements. These are not abstract benefits. They translate directly into reduced costs, lower risks and stronger competitive positions. Businesses that treat sustainability information as a strategic input are better equipped to respond to disruption and seize opportunities as markets and regulations evolve.
SMEs working with compliance and carbon reporting services can build these capabilities progressively. The starting point is understanding what information is material to the business, where it can be sourced reliably and how it should be governed and reported. From there, businesses can begin to integrate sustainability data into risk registers, budgets and strategic planning.
Building the skills and systems for reliable reporting
Finance professionals need technical skills in sustainability and climate-related analysis. This includes understanding greenhouse gas accounting, Scope 3 emissions, climate scenario analysis, nature-related risks and the requirements of reporting standards such as ISSB. Training and professional development are essential, particularly for teams that have not previously worked on sustainability issues.
Information systems also need to be adapted or replaced. Many organisations find that existing systems were not designed to capture, validate and report sustainability data. Consequently, data may be scattered across departments, held in spreadsheets or collected manually. This makes it difficult to ensure accuracy, consistency and completeness. Investment in systems, processes and governance is necessary to make sustainability reporting reliable and useful.
Early preparation strengthens governance. Companies that began reporting voluntarily before it became mandatory invested sooner in information systems, governance arrangements and board awareness. This gave them a stronger foundation for implementation and allowed them to use sustainability information in strategy, risk management and capital expenditure decisions.
Businesses can access support through training programmes on carbon reporting and sustainability disclosure. These programmes help finance teams build the skills they need to assess materiality, prepare disclosures and integrate sustainability information into financial planning and risk management.
Where to find further guidance and resources
The ACCA report, Asia Pacific builds a sustainable future, is available on the ACCA website. It provides detailed recommendations for finance leaders, boards and sustainability teams on integrating sustainability information into governance, risk management and decision-making.
ACCA's 2024 research, Weathering the storm: Building resilience against climate disruptions, is also available from ACCA. It explores how organisations are preparing for physical climate risks and identifies gaps in resilience planning.
The International Sustainability Standards Board publishes detailed guidance on sustainability reporting standards. Information on ISSB standards, adoption timelines and implementation resources is available on the IFRS Foundation website.
UK businesses can find information on sustainability disclosure requirements through the UK government's guidance on Sustainability Disclosure Requirements. This includes details on which companies are in scope, what information must be reported and when requirements take effect.
Guidance on Procurement Policy Note 06/21 and carbon reduction plans for public sector suppliers is available from UK government procurement guidance. This resource explains the requirements for publishing a carbon reduction plan and how it should be structured.