Author

Joanne Madrid, journalist

A growing number of Asian companies are shifting from broad sustainability disclosures to more focused, materiality-driven reporting, placing accountants at the forefront of this transition.

In Singapore, the Accounting and Corporate Regulatory Authority released the Sustainability Reporting Body of Knowledge (SR BOK) in May 2025, a framework designed to equip professionals, particularly accountants, with the skills needed for greenhouse gas accounting and materiality-focused sustainability reporting. The SR BOK aligns closely with IFRS Sustainability Disclosure Standards, emphasising relevance in environmental, social and governance (ESG) disclosures.

A recent report by Forvis Mazars says that companies are zeroing in on ESG metrics with clear financial or operational relevance. The ‘everything counts’ era is fading; what’s rising is investor-grade sustainability reporting, and accountants are leading the way.

‘In sustainability reporting, the greatest challenge is dealing with uncertainties’

‘Our approach to materiality has evolved significantly for ESG-related disclosures,’ says Pamela Fan, ESG assurance partner at KPMG in Singapore. ‘In today’s context, ESG-related disclosures are increasingly expected to align with the entity’s financial statements. As a result, the concept of materiality in ESG disclosures has broadened.’

Quality control

‘An aspect that is deemed financially immaterial might be considered material from a sustainability reporting perspective,’ says Indrie Tjahjadi, sustainability and climate change director at PwC Singapore.

Sustainability reporting must now involve a broader set of stakeholders – customers, employees and local communities – while also factoring in ESG risks that may not show up in a balance sheet. Geographic context, regulatory expectations and industry-specific issues further complicate the picture.

According to Tjahjadi, the biggest hurdle remains data quality. ‘In sustainability reporting, the greatest challenge is dealing with uncertainties,’ she says. ‘With limited organisation-specific historical sustainability data, which is frequently incomplete and inaccurate, accountants must rely on generic data that may be available only at a broader level, such as national or global data.’

Matter of judgment

The lack of robust, localised ESG data makes the process more hypothetical and judgment-based, according to Edmund Li, ESG and sustainability reporting partner at Crowe (HK) CPA. In many cases, accountants must evaluate complex ESG issues, such as greenhouse gas emissions or labour practices, without access to concrete, company-level data. Instead, they rely on broader datasets and informed assumptions, often with limited experience to guide prioritisation or risk interpretation.

The lack of clarity, paired with limited precedent, makes it difficult to defend materiality assessments with confidence. ‘Since it is new and may not be easily supportable upon the determination of materiality to sustainability metrics, disputes may arise, and it causes accountants to be challenged to defend their determinations,’ says Li.

Into practice

To navigate this, companies are increasingly relying on international sustainability frameworks to guide the identification of material topics and disclosure priorities.

But while frameworks guide materiality decisions, Li notes that accountants need to develop additional skills and professional judgments to evaluate sustainability performance for stakeholders.

‘The market’s demand for transparent information is growing’

Once potential material topics are identified, accountants prioritise them. With deep knowledge of business operations, supply chains and stakeholder concerns, they bring structure to the process. When it’s time to finalise material topics, they help determine which issues have financial implications, drawing on historical trends, internal data or external benchmarks.

In September 2024, Securities Commission Malaysia introduced the National Sustainability Reporting Framework (NSRF), mandating sustainability reporting for listed and large non-listed companies starting this year. The NSRF requires companies to identify and report on material ESG issues, with accountants expected to lead assessments that tie sustainability risks and opportunities directly to business outcomes.

Spotlight on accountants

‘The market’s demand for transparent and reliable sustainability information is growing, and reporting standards have become more stringent,’ says Tjahjadi. ‘Accountants possess essential skills that are critical for delivering high-quality sustainability reporting.’

The spotlight is now on accountants to take the lead. As long-time stewards of financial data, they can design systems that capture, verify and analyse sustainability information with the same level of rigour they apply to financial reporting.

They are well-positioned to bridge the two worlds: integrating ESG metrics into financial disclosures and providing a more holistic view of organisational performance. ‘With their understanding of both financial and sustainability data, accountants can guide organisations in aligning sustainability goals with business objectives,’ says Tjahjadi.

‘Accountants communicate expectations from the market and the public’

Accounting professionals also play a major role as facilitators, helping stakeholders interpret sustainability data and understand its broader implications.

‘Their roles are dynamic and two-way. Accountants communicate the requirements and expectations from the market and the public on what should be disclosed in sustainability-focused reporting,’ says Li.

Still, the road ahead demands more. Only 44% of Asian firms feel prepared to meet their sustainability targets, according to a 2025 joint survey by Hong Kong Trade Development Council and EY. This signals an urgent need for deeper ESG integration, where accountants’ cross-functional expertise is proving indispensable.

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