A key theme in ACCA Singapore’s second virtual conference, entitled ‘Reshaping Finance: Digitally Enabled, Sustainability-Focused’, was how Covid-19 has magnified the vulnerabilities of companies and the economy, and how businesses and industries alike need to shift their focus towards sustainability.
In his welcoming speech, Mark Millar, ACCA president, spoke about how the pandemic has raised issues about the future of the planet – the challenge of new technology, the need for new business models, and ultimately what the profession could do to be part of the solution.
Millar urged accounting professionals to look optimistically ahead. ‘I believe that new ways of working offer wonderful opportunities to carve out new kinds of careers; to assume positions of greater responsibility and creativity in our organisations; and ultimately to enjoy more satisfying, more rewarding and more fulfilling careers and lives,’ he said.
To help accountants with this transition, ACCA has come up with several initiatives. These include two recent reports – Future ready: accountancy careers in the 2020s and Groundbreakers: Gen Z and the future of accountancy, which showcase the profession’s transformation roadmap, and how accountants could look forward to using their skillsets to make a meaningful difference in the world.
‘I believe that new ways of working offer wonderful opportunities to carve out new kinds of careers’
Risk assessment
Presenting a broad framework of sustainability for the post-pandemic future was guest-of-honour Grace Fu, minister for sustainability and the environment. She began by defining sustainability as ‘the ability to mitigate your business risk, protect the environment you operate in and ensure the longevity of your resources’.
Fu said that one obvious business risk was Covid-19, which had already impacted many businesses – pushing them to change their operations and business models. She added, however, that it was also necessary to watch out for other risks such as climate change.
‘We have already seen the impacts [of] floods and droughts, extreme cold and heat; how it impacts on lives and properties; and how it threatens our access to water and food,’ she said.
‘Low-lying islands in the tropics, like Singapore, are especially vulnerable to effects such as rising sea levels.’
Sustainable planning
To mitigate against these risks, Fu introduced two new government initiatives. The Singapore Green Plan 2030 sets out 10-year targets for sustainable development, as well as fulfilling commitments under the UN Sustainable Development Agenda and the Paris Agreement.
In addition, green finance is seen as as a key enabler of green growth opportunities. This includes issuing up to S$19bn of green bonds to support initiatives in renewable energy, green buildings, sustainable water and wastewater treatment.
The subject of green finance was also addressed by Abigail Ng, executive director of the corporate finance and consumer department at the Monetary Authority of Singapore (MAS).
‘We have pushed out guidelines to establish clear expectations on risk management standards and practices’
Collaborative opportunities
In December 2020, ACCA became the first professional accountancy body to officially commit to reaching the UN Sustainable Development Goals (SDGs).
At ACCA Singapore’s virtual conference, Soo Yee Leong, ACCA’s executive director – markets, said that this commitment means working in partnership to build an inclusive global profession that supports the development of ethical, sustainable and successful businesses and economies.
‘Professional accountants have a key role in helping businesses and organisations meet sustainability goals, including the UN SDGs.’
She added that ACCA Singapore’s charity partner, the Garden City Fund, was already working with the National Parks Board (NParks) to explore collaborative opportunities to green the city-state.
ACCA’s Plant-a-Tree programme, led by the community and social impact interest group, supports NPark’s One Million Tree movement by encouraging ACCA members, students and the wider business community to play an active role.
‘This collaboration will be one of many actionable steps we will embark on, together with our communities, to contribute significantly towards quality education, gender equality, climate action, decent work and economic growth,’ she said.
She described how green finance was vital in mobilising private and public capital to secure the transition to a low-carbon economy, ‘given the existential threats that climate change was posing to the world’.
Ng added that MAS had developed a Green Finance Action Plan – a US$2bn investment programme to finance green solutions and set up environmental risk management guidelines across the banking, insurance and asset management sectors.
She said that as a developer of the financial markets in Singapore, MAS is committed to developing green financial solutions for businesses in Asia. These include using grant schemes such as the Sustainable Bond, as well as Green and Sustainability-Linked Loans to support corporates in investing in green assets and moving to sustainable business models.
Regulatory support
Ng talked about the importance of introducing clear taxonomies, guidelines and best practices to build up the resilience of the financial system to deal with risks relating to climate change and the transition to a low-carbon economy.
‘We have pushed out guidelines on environmental risk management to establish clear expectations for financial institutions on risk management standards and practices,’ Ng said, adding that the government is ‘looking to enhance climate-related financial disclosures’.
Addressing the ‘digitally enabled’ part of the conference’s theme, Ng acknowledged the importance of digital’s role in Singapore’s journey to sustainability.
She noted that good data was needed to perform effective monitoring of environmental, social and governance metrics, but that the current process of data acquisition was still ‘very manual – expensive, cumbersome and prone to human errors’.
Ng concluded: ‘I think green fintech is going to go a long way in solving these problems – using the Internet of Things, sensors and satellite images to collect data from the source in a timely manner.’
Role to play
In addition to what was being done at the ministerial and regulatory level, Fu also touched on the role and opportunities for accounting professionals and the wider business community in furthering sustainability.
‘Along with all these new growth areas in green products and services, a new demand for measurement and reporting, management and mitigation of sustainability footprints will surface and rest on the shoulders of many of you present today,’ she said.
Fu focused on three areas in which delegates could contribute:
- Leadership.‘Take the lead in transforming your business practices and inspire others to do the same.’
- Technology. ‘The use of technology can improve decision-making, optimise the use of resources, and reduce wastage.’
- Commitment. ‘We can champion and push for adequate environmental, social and corporate governance in our organisations, which can have long-lasting effects on sustainable practices.’
‘Accountants are used to applying high-quality globally accepted standards and familiar with what assurance means,’ Ng added. ‘You know how these things work in adding credibility to management reporting.
These are transferable skills. Collectively, what we need to do now is to broaden and adapt these skills to a sustainability context.’
