Shift in ASEAN sustainability reporting shows progress from Vietnam
The Association of Chartered Certified Accountants (ACCA) has recently released a report highlighting the need for ASEAN nations to take a more active role in shaping global policy and standard-setting in sustainability reporting. The report, focusing on the accounting for carbon-related instruments in 300 companies across 46 jurisdictions, outlines challenges and provides recommendations to support the transition to the International Sustainability Standards Board’s (ISSB) global baseline.
The report calls for standard-setting bodies, such as the International Accounting Standards Board and the International Auditing and Assurance Standards Board, to accelerate efforts to develop clear guidance on the treatment of carbon-related instruments. The findings carry particular relevance for emerging markets, including Vietnam, which is currently in the early stages of establishing a domestic carbon market.
As of mid-2025, ASEAN nations are actively progressing towards aligning their sustainability reporting frameworks with the ISSB’s global baseline standards. Countries such as Malaysia, Singapore, Thailand, Indonesia, the Philippines, and Vietnam are at various stages of adopting or preparing to adopt ISSB standards.
However, the report also raises concerns about a potential disconnect between climate-related operational activities and financial reporting. Auditor involvement was found to be limited, with a lack of evidence regarding detailed audit review in cases where carbon instruments were disclosed. Biodiversity reporting remains especially weak in Vietnam, with fewer than 20% of companies including such content.
The ACCA report highlights several challenges facing ASEAN’s transition to globally aligned sustainability reporting. Regulatory inconsistency across member states creates uneven readiness and compliance levels. Companies face increasing pressure to meet global investor expectations and comply with international policies such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and the Corporate Sustainability Reporting Directive (CSRD).
To address these challenges, the ACCA report offers several key recommendations. These include greater regional advocacy and influence in global policymaking, investing in capacity building across the region, emphasising proportionality in applying ISSB standards, and encouraging a coordinated approach to sustainability disclosure regulations.
In summary, ASEAN is moving forward positively in aligning with ISSB global baseline standards but faces challenges such as varied regulatory readiness and capacity constraints. The ACCA report underscores the need for stronger regional coordination, capacity development, and active participation in global sustainability governance to secure a sustainable economic future for the region. The report also recommends a building-blocks approach that allows countries to adopt the ISSB framework as a core baseline, while adding localised disclosure requirements.
- Given the ACCA report's recommendations, it would be prudent for environmental-science scholars in ASEAN to collaborate with financial experts to develop a comprehensive understanding of the treatment of carbon-related instruments, thereby bridging the gap between climate-change operations and financial reporting in businesses.
- As Vietnam progresses towards establishing a domestic carbon market, it is crucial for businesses to pay close attention to the report's concerns regarding biodiversity reporting, which currently stands at a meager 20%, and strive to improve this aspect to foster a more sustainable business environment.
