Asia Pacific has emerged as the global leader in adopting international sustainability reporting standards, but businesses across the region are still struggling to turn climate disclosures into meaningful business resilience, according to new research by the Association of Chartered Certified Accountants (ACCA).
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More than 80 per cent of Association of Southeast Asian Nations (Asean) economies by gross domestic product (GDP) have adopted or plan to adopt standards issued by the International Sustainability Standards Board (ISSB), the report found. Across Asia Pacific, economies that have adopted or plan to adopt the standards account for nearly US$60 trillion in GDP, or about 47 per cent of the global economy. These include mainland China, where adoption is currently voluntary but is expected to become mandatory in the future.
Despite the rapid policy uptake, ACCA’s report, Asia Pacific builds a sustainable future, argued that many companies continue to treat sustainability reporting as a compliance exercise rather than using the information to guide investment decisions, manage risks or identify new business opportunities.
That distinction will become more significant as sustainability reporting requirements become more stringent, said the study. In Malaysia, the largest listed companies are expected to face reasonable assurance requirements for Scope 1 and Scope 2 greenhouse gas emissions from 2028.
“The region has done the difficult institutional work,” said Sharath Martin, senior policy consultant at ACCA Asia Pacific. “The narrative now needs to shift from producing disclosures to making businesses more resilient.”
That shift is particularly important given the region’s reliance on fossil fuels, suggested the study. Much of Asia Pacific’s rapid economic expansion has been powered by cheap fossil fuels that became embedded in its economies before climate risks became a major concern. The region now sits at the centre of both the climate challenge and the energy transition: it is the world’s largest source of greenhouse gas emissions, but also leads in new clean energy generation, the report noted.
Asia Pacific accounted for 60.1 per cent of global greenhouse gas emissions in 2024, yet also contributed 70 per cent of renewable energy capacity added worldwide that year, according to figures cited in the report. The study also identified Asia as the only region broadly on track to triple renewable energy capacity by 2030 in line with a pathway consistent with limiting global warming to 1.5°C.
Martin said finance leaders, particularly chief financial officers, are well positioned to integrate sustainability into business planning. Decarbonisation, he argued, should be viewed not only as an emissions reduction strategy but also as protection against fossil fuel price volatility, rising costs and supply chain disruptions.
Climate risks and tighter export rules raise stakes for businesses
Beyond the energy transition, the report identified water scarcity and extreme heat as among the region’s most significant long-term economic threats.
Citing the Global Commission on the Economics of Water, ACCA noted that these pressures could reduce GDP by around 8 per cent in high-income economies and between 10 and 15 per cent in lower-income countries by 2050 if left unaddressed.
Flooding already represents one of the region’s most persistent climate risks. According to Unescap, floods accounted for more than half of the 7.2 billion people affected by disasters across Asia Pacific between 1970 and 2024.
Alongside these physical risks, Asia Pacific businesses face growing sustainability requirements in export markets. The report warned that European Union sustainability due diligence and reporting rules will increase pressure on exporters to meet stricter environmental and social requirements.
Without greater regional collaboration, suppliers could face uneven compliance burdens that risk creating what ACCA describes as a “race to the bottom” in sustainability practices.
Yet Asia Pacific’s growing adoption of international reporting standards has not been matched by its representation in setting them.The region currently holds only three of the 12 seats on the ISSB, with no representatives from Asean, despite its leading role in adopting the framework, the report noted.
Helen Brand, ACCA’s chief executive, said the region had moved faster than anywhere else in building the foundations for sustainability reporting. But she cautioned that adopting reporting standards alone would not automatically accelerate decarbonisation or address broader sustainability challenges.
“Professional accountants are trained to ask where a number came from, who prepared it, and what interest shaped it. Those questions are now being asked of climate data, nature dependencies, labour conditions, and algorithms,” said Brand.
