News

ACCA: M’sian businesses should set net-zero targets

Report reveals only 24% of local organisations willing to invest more in addressing climate change over the next 3 to 5 years 

by S BIRRUNTHA / Pic by TMR

THE Association of Chartered Certified Accountants (ACCA) said there is an urgent need for Malaysian businesses and individuals to step up the pace in transitioning towards net-zero carbon emissions. 

ACCA senior policy consultant for Asean and ANZ (Australia and New Zealand) Sharath Martin said the association’s new report titled “Climate Action and the Accountancy Profession: Building a Sustainable Future” revealed that only 24% of Malaysian organisations were willing to invest much more in addressing climate change over the next three to five years. 

He noted that this is significantly lower than the global average of 38%. Martin added that the report also revealed that 52% believed climate regulations will have the biggest impact on organisations over the next five years, yet only 15% reported that their organisations have set targets to get to net-zero by 2050. 

Furthermore, only 23% integrated climate key performance indicators (KPIs) into their business strategy and/or risk frameworks. 

“These findings, in light of the global move towards climate action, tells us this is an opportune time for organisations to take a closer look at the way they operate,” Martin noted in a recent statement. 

To help bridge these gaps, the report has outlined key steps accountants should take on climate action. 

These include supporting boards and executive leadership to build net-zero transition plans, leveraging on science-based targets and prioritising environmental, social and governance and climate KPIs in strategic business decisions, among others. 

The report also highlighted a call to action to governments, where it emphasised that governments must raise their efforts in not just setting net-zero targets by a specified year, but also intermittent targets for the end of each decade leading up to 2050. 

It said more importantly, they need to outline strategies and plans to realise the achievement of those targets. This should cover key industries, energy sources, mandates for business and society, as well as policy interventions that both incentivise and disincentivise required outcomes for the wellbeing of future generations. 

Additionally, the report said most organisations are being reactive by awaiting government direction. 

As a result, many, especially those without the necessary human or financial resources, are woefully unprepared to meet net-zero targets. 

“Governments must help business through practical guidance and support if net-zero goals are to be achieved, including through the involvement of local and regional authorities. 

“This includes supporting them to transform to more environmentally friendly ways of operating, deliver business changes that reduce carbon emissions and design ways of tracking progress on carbon reduction and net-zero targets,” the report noted. 

It also said governments must help organisations gain access to the expertise required to meet net-zero, whether that is through up/ re-skilling employees, or providing free or cost-effective external support. 

It added that governments must step in to provide organisations of all sizes access to this guidance, support and the tools they will need to meet carbon reduction and net-zero. 

“Here, there is a role for knowledge hubs where governments and those organisations leading the way in carbon reduction and net-zero can provide expertise and support tools, which can be adopted by the wider business community,” the report stated. 

Apart from that, the report stressed that governments need to work together, as the climate crisis does not recognise borders and many businesses and organisations operate internationally, if not directly then often indirectly via supply chains. 

Therefore, it said it is vital that governments work together to create a collaborative and symbiotic approach to supporting businesses and organisations, particularly small and medium enterprises, in preparing for and delivering carbon reduction and net-zero targets. 

According to ACCA, it has accelerated its commitment towards sustainability in recent months, with active participation in pro-ESG initiatives, alongside its campaign on rethinking sustainable business. 

It added that these concerted efforts aim to encourage the integration of environmental and social value and analysis into financial reporting, in order to foster trust and accountability among stakeholders and the public. 

Moving forward, ACCA noted that it is important that accountants measure not just how businesses are impacting the environment, but equally how climate and natural capital risks will impact the ability of businesses to generate value going forward. 

“As the world continues to face the challenges of climate change, we hope for every nation, organisation and individual to play an active role in making meaningful and impactful change and thus accelerate the shift towards net-zero carbon emissions,” Martin said. 

Dzul

Recent Posts

Twists and turns before PM 10 takes oath

Some of the major events that happened last week prior Anwar’s appointment as PM  PAKATAN…

5 mins ago

Brunei Sultan surprises Anwar by driving him to Seri Perdana

The Sultan of Brunei, Sultan Hassanal Bolkiah in a surprise move took over the wheel of…

34 mins ago

Democracy at work, maybe

We are seeing democracy’s rough edges  LIKE it or hate it, it is a relief…

39 mins ago

Penang the largest contributor to Malaysia’s exports in October

Malaysian exports rose 15 per cent year on year to RM131.6 billion in October 2022, with Penang…

45 mins ago

Too young for politics?

WHAT a whirlwind of a general election we just saw.  Expecting a new government by…

53 mins ago

Hatchets buried, hope blooms

Anwar will have his work cut out for him to address the economy, and the…

3 hours ago