ACCA (the Association of Chartered Certified Accountants) and Ernst & Young Advisory Services (EY) have published a report urging financial and corporate leaders to strengthen sustainability reporting in ten key areas. This report, titled "Sustainability Reporting: Tracking Your Progress - GBA Insights," indicates that despite increasing regulatory requirements, many organizations are still in the early stages of establishing the necessary infrastructure for reporting.
Challenges in Sustainability Reporting
According to the data from this study, 41% of global respondents and 36% of Greater Bay Area (GBA) participants cited a lack of knowledge as a major operational barrier. Additionally, 35% of global respondents and 27% of GBA participants identified the immaturity of the reporting ecosystem as a significant issue. Almost one-third of respondents in the first group and 31% of GBA participants mentioned difficulties in understanding stakeholder needs.
While compliance and financial assessment are the main drivers of disclosures in both groups, GBA respondents placed greater emphasis on risk management, whereas global respondents focused more on providing broader non-financial perspectives. Furthermore, strategic planning is a priority for 44% of global participants.
Proposed Actions for Improving Reporting
To address these challenges, the report outlines ten specific actions. The most important of these actions is to go beyond mere compliance and use sustainability data to enhance strategic resilience, business opportunities, and long-term performance. Organizations should prioritize standards relevant to their jurisdictions and supply chains and leverage legal guidance, supportive mechanisms, and incentives.
Operational resilience requires a comprehensive operational review to identify critical resources, dependencies, and cost-related risks. Establishing regular two-way communication with investors, customers, suppliers, employees, and regulatory authorities should become an institutionalized practice to improve data quality and governance decisions.
The authors also recommend that financial and sustainability data systems be integrated, inter-industry collaborations be established to enhance capacity, and flexible access to specialized technical skills be provided. Ultimately, the report emphasizes that leaders and accountants must act immediately and warns that delays in implementation will increase the costs of responding to future market and regulatory demands.
Wilson Cheng, President of ACCA Hong Kong, stated: "Today, sustainability expectations are becoming increasingly precise, and companies are accessing specialized expertise to maintain higher standards, ensure data quality, and align sustainability accounting practices. Accountants are well-positioned to support these efforts and, by leveraging their strengths in compliance, internal controls, and data governance, create reliable data collection and management systems for sustainability reporting."
