The sustainability reporting challenge

Sustainability reporting is moving from a specialist exercise to a core test of how an organisation understands risk, strategy and long-term value. But while regulation is setting a clearer direction, many organisations in the Greater Bay Area (GBA) are still building the skills, systems and controls needed to produce credible information.

That is the central finding of a new ACCA and EY report, Sustainability Reporting: Track Your Progress – GBA Insights. It draws on a targeted survey, conducted in October 2025, of more than 90 GBA respondents in accountancy firms, financial services, large corporates and non-profits, and compares the findings with ACCA’s global survey of more than 1,000 respondents.

ISSB alignment

The report arrives as Hong Kong SAR of China moves towards ISSB-aligned sustainability disclosure standards for publicly accountable entities by 2028, under the government’s sustainability disclosure roadmap, published in December 2024. International Sustainability Standards Board (ISSB) reporting requirements are likely to have implications for organisations that are not directly in scope, as in-scope companies seek sustainability-related information from their suppliers, business partners and other value-chain participants.

The regulatory direction is clear. But the report argues that the real challenge is translating high-level standards into material disclosures, reliable data and information that supports decisions.

‘What was once a compliance exercise is rapidly evolving into a strategic imperative, with organisations expected to demonstrate not only regulatory conformity but also the ability to produce meaningful, decision‐useful information that drives long‐term resilience and stakeholder trust,’ the report says. ‘Translating high-level standards into actionable data systems, material disclosures and credible reporting continues to be a significant barrier.’

The reporting test

All sustainability reporting frameworks seek to help investors and other stakeholders understand the risks and opportunities that affect an organisation. Yet the coexistence of standards and guidelines – including those from the ISSB, the EU and the Global Reporting Initiative (GRI) – can make implementation difficult.

The report identifies a potential ‘translation gap,’ where organisations struggle to turn reporting requirements and stakeholder expectations into clear materiality assessments, metrics and disclosures. This can arise when material topics are mismatched or poorly prioritised, reporting is inconsistent, or stakeholders’ needs are not fully understood.

The survey suggests that these are practical, not merely technical, problems. Some 36% of GBA respondents identified knowledge of reporting requirements as a key challenge in identifying the information that matters most to stakeholders. A further 31% pointed to understanding the needs of different stakeholders, while 27% cited the immaturity of the sustainability reporting ecosystem.

The report says organisations need an end-to-end understanding of their business – everything from their operations and value chains to the resources and external relationships on which they depend. This should help them identify vulnerabilities, risks and opportunities, then decide which matters are material.

Stakeholder engagement is central to that process. Reporting should not be designed solely around investor needs, the report says, but informed by regular dialogue with regulators, policymakers, employees, consumers, local communities and other relevant groups.

Different priorities

The research also points to a difference in the way sustainability reporting is being approached in the GBA and globally.

GBA respondents placed the greatest emphasis on understanding the financial impacts of sustainability-related risks and opportunities (39%), followed by compliance with regulations (35%) and managing risks (29%). Globally, compliance was the leading consideration (44%), followed by understanding financial impacts (36%) and understanding non-financial impacts (31%).

That distinction is reflected in the perceived role of accountants. Globally, respondents identified supporting the development of sustainability-related strategies as accountants’ most important contribution. In the GBA, the top answer was assuring sustainability-related information.

The GBA focus on assurance is understandable. As sustainability information becomes subject to greater scrutiny, and with independent assurance to be phased in for listed companies and relevant financial institutions under the proposed HKFRS Sustainability Disclosure Standards, organisations need confidence in the quality, consistency and governance of their data. The report points out that Hong Kong SAR’s sustainability disclosure roadmap and its HKSSA 5000 sustainability assurance standard give the market a clearer framework for adopting globally relevant disclosure and assurance practices.

For accountants, that creates a dual role. Their experience in internal controls, data governance and assurance can help organisations build dependable reporting processes. But they can also help management connect environmental and social issues with financial performance, risk and strategic planning.

Getting practical

External guidance plays an important role in closing capability gaps. Nearly half of GBA respondents (47%, compared with 46% globally) said advice from sustainability experts would best help them manage challenges in creating and using sustainability information. Guidance from regulators and standard-setters was the next most common choice (35%, compared with 45% globally), followed by insights from organisations that have already implemented sustainability reporting (26%, compared with 39% globally).

Such support can help companies interpret principles-based standards, develop data systems and learn from implementation experience. But the report cautions that external expertise should build internal capability, not substitute for it, with organisations moving ‘from external dependency to internal ownership and leadership’.

Delay carries its own risks. Organisations that start with existing financial reporting systems, strengthen their data and controls, and improve through successive reporting cycles will be better placed to meet regulatory expectations and use sustainability information as part of strategic decision-making.

‘Start now, seize opportunities and build momentum,’ the report concludes.