As the temperatures around Europe and the rest of the world continue to soar to record levels along with unrests over social inequalities, Environmental, Social and Governance (ESG) adoption and compliance has taken centre stage. Closer to home, major and frequent floods are expected to continue in Malaysia. We are also experiencing more frequent and severe heatwaves. As Malaysia faces the realities of climate change and social disparities, the importance of ESG has come to the forefront.
According to KPMG’s biennial Survey of Sustainability Reporting 2022 , 97% of Malaysia’s Top 100 companies include sustainability data in their annual reports. Malaysia is also making strides in sustainable investment and ESG practices, with a focus on strong governance. In 2022, the overall ESG score for Malaysian companies was 2.5 out of 5, which represents a 33.7% increase since 2018.
Transparency and accountability lie at the core of corporate sustainability practices. Amidst these developments, professional accountants, equipped with their expertise in financial reporting and regulatory compliance, are uniquely positioned to ensure that businesses adhere to ESG standards and accurately communicate their sustainability efforts. By disclosing relevant sustainability information, accountants build trust between businesses and their investors, customers and stakeholders.
Accountants play a crucial role in shaping a sustainable and responsible future. They are becoming agents of positive change, promoting transparency, accountability and corporate responsibility. As businesses recognise the significance of sustainability, accountants are embracing their evolving role as advocates for sustainability.
Additionally, accountants today are not just financial experts – they are instrumental in assessing and addressing environmental and social impacts, measuring contributions to sustainability, and aligning financial reporting with ESG metrics. By integrating sustainability practices into their work, accountants provide stakeholders with a comprehensive understanding of an organisation’s long-term value creation and its impact on society and the environment.
The integration of ESG into financial reporting also aligns with the International Financial Reporting Standards (IFRS), showcasing businesses’ commitment to sustainability and responsible practices. As investors prioritise ESG, this alignment impacts investment decisions.
Recognising the pivotal role of accountants in sustainability, The Malaysian Institute of Certified Public Accountants (MICPA) and Chartered Accountants Australia and New Zealand (CA ANZ) have collaborated to develop the MICPA x CA ANZ Qualifying Programme This forward-thinking curriculum emphasises sustainability and ESG principles, preparing accountants to meet the evolving demands of corporate sustainability.
The programme instils a deep understanding of sustainability concepts, such as identifying and measuring environmental and social impacts, conducting risk assessments, and developing sustainable strategies for organisations. It aims to produce accountants who are well-versed in the evolving demands of corporate responsibility and foster a mindset of corporate stewardship, where accountants are empowered to contribute to the sustainable growth and success of the organisations they serve.
Beyond number-crunching, accountants now act as strategic advisors, championing sustainable practices and guiding businesses towards ethical decision-making. Their expertise in ESG integration drives positive change, making a tangible impact on society and the environment.
From reducing carbon footprints to promoting social inclusivity, accountants are now key drivers of progress towards achieving the United Nations’ Sustainable Development Goals. In Malaysia’s pursuit of a greener and socially responsible future, accountants are proving to be indispensable partners and they are at the forefront of this transformational journey towards a more sustainable and equitable world.
By Foo Yoke Pin, Executive Director of The Malaysian Institute of Certified Public Accountants (MICPA)