NANYANG EXECUTIVE MBA

Balancing people, planet, and profit: How sustainability drives businesses, with accountants leading the charge

The clock is literally ticking on climate change. We have less than five years before global temperatures reach a point of no return of 1.5°C of warming, beyond which global warming becomes irreversible.

This deadline is pushing governments to meet global environmental targets by 2030 to address rising temperatures from climate change and reverse massive biodiversity loss.

Businesses must now go beyond counting their profits to measuring the impact of their operations on the environment. They’re on the clock, too – under pressure from both consumers and regulators to commit to sustainability in practice, not just in name.

Green accounting, or sustainability accounting, has increasingly become central to companies’ operations. With sustainability accounting on the rise, accounting personnel must take on a larger leadership role in helping businesses meet their sustainability targets.

In a recent NBS Knowledge Lab seminar – and in ensuing conversations – Goh Kia Hong, senior lecturer at Nanyang Business School’s Accounting division, and Anne Liew Mei Hong (Nanyang Executive MBA ‘25), chief financial officer at Chuan Hup Holdings Limited, highlighted the benefits of sustainability reporting for businesses, and detailed how accountants can lead the charge.

Sustainability reporting and accountants’ evolving roles

The United Nations defines sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

In this context, green accounting measures the environmental costs and benefits of economic activities, aiming to maintain environmental sustainability and meeting corporate social responsibilities.

Governments have made sustainability a legal obligation for businesses in their jurisdictions. For instance, Singapore now mandates SGX-listed companies to report Scope 1 and Scope 2 greenhouse gas emissions, in line with global standards like the International Sustainability Standards Board (ISSB).

To accurately report on this expanded view of a company’s business activity, accountants must go beyond their traditional focus on financial data to “tracking, reporting, and verifying non-financial data related to ESG (environmental, social, and governance) factors,” Anne says.

“Only the accountant has visibility into the entire ecosystem,” she adds. This puts them “in the best position to find a balance between complying with sustainability and achieving profit goals.”

Kia Hong understands that this new role might stretch accountants’ current comfort levels. “Integration of non-financial data – especially related to environmental and social impact – can be complex,” he says. “Accountants need to adapt to new methodologies, terminologies, and regulatory frameworks.”

Overcoming data collection challenges

Accurate metrics are the foundation of effective green accounting. “Ensuring the accuracy and consistency of data is crucial in sustainability reporting, and it is also the most challenging part,” says Anne.

While global reporting frameworks like the ISSB provide accounting professionals with a reporting template to follow, Kia Hong notes that collecting accurate metrics is often easier said than done. For one, he notes that “accountants have limited expertise in environmental metrics such as carbon emissions and energy use.”

He also recognises that there is a “lack of standardised methods for collecting non-financial data.” For example, “qualitative factors like employee well-being or societal impact” are difficult to measure.

Despite these challenges, Kia Hong suggests several methods for improving data accuracy: accountants should rely on “verified, reliable data sources” and apply “clear methodologies, such as the GHG Protocol for emissions.”

He adds that “collaborating with experts in environmental science and engineering” and “leveraging digital tools such as data analytics, AI, and IoT (Internet of things) systems to automate and verify data collection processes” can improve the reliability of sustainability metrics.

For Kia Hong, accurate reporting promotes an ethical approach that “builds trust with stakeholders and reduces long-term risks,” minimising the temptation to resort to superficial claims (greenwashing) or silence (greenhushing).

“Accountants play a crucial role in ensuring transparent, honest reporting by adhering to clear standards, such as those set by the ISSB, and emphasising the importance of accuracy in disclosures,” he points out.

Aligning sustainability with corporate strategy

Anne notes that accountants are in an “ideal position to communicate sustainability performance to stakeholders (management, the board, auditors, and shareholders).”

This indicates a duty to advocate for closer alignment between corporate strategy and sustainability – for instance, by integrating sustainability goals into the company’s core business objectives and strategic plans, “to make sustainability a driver of business performance rather than a side project,” as Anne puts it.

Anne also recommends “linking sustainability strategy to value creation for stakeholders such as increased brand reputation, improved customer loyalty, better employee retention, and improved investor confidence.” An Oxford University meta-study supports this observation, finding that 80% of respondents saw stock price performance positively influenced by good sustainability practices.

Anne also proposes that “individual departmental KPIs should include sustainability reporting elements.” She adds that this can incentivise employees at all levels to prioritise sustainability in daily tasks and decision making, embedding sustainability in operational practices over the long term.”

Building a culture of sustainability

Anne stresses that sustainability is not solely the responsibility of the accounting department but requires a “concerted effort across the board – from stakeholders, the board of directors, and vendors.”

“Everyone plays a role, but I think accountants can be the project leaders in the data collection process,” she says. “The role of accountants is to marry this data into a business perspective – showing its implications on cost, revenue, and risk.”

Training and education can help foster a broader understanding of sustainability principles across different departments. Training achieves several goals at once: “creating awareness, building internal capacity, and building more support and consensus across different departments in the organisation,” Anne points out.

What is most important, Anne notes, is that “at the end of the day, the entire organisation needs to align with the same vision to achieve the goals set by the company.”

Anne also advocates for implementing specialised accounting software that integrates with existing ERP (enterprise resource planning) systems and supply chain data sources. This is “to facilitate data collection while improving traceability and accuracy” – enabling more effective monitoring and reporting of sustainability performance.

The future of green accounting

For Kia Hong, tomorrow’s accountants will need to adjust to a future that “will increasingly blend financial and non-financial reporting, which requires them to expand their roles in ESG, climate risk assessment, and integrated reporting.”

In brief, they’ll need to rise above a limited reporting-only role to “become strategic advisors, helping businesses navigate sustainability challenges while remaining financially viable…. as standards become more widespread, the role of accountants will evolve towards ensuring holistic accountability – encompassing environmental, social, and economic dimensions.”

As accountants upskill and diversify their skill sets, they will be able to serve more organisations integrating sustainability into their operations – and do their part to race against the clock and meet sustainability goals.

The Nanyang suite of MBA programmes can help prepare finance executives for this sustainability-focused finance regime. The period of study spans between 12 months to 2 years, depending on the chosen programme.

The programmes emphasise developing culturally aware, impactful leaders who grasp the synergy between business, technology, and innovation, empowering them to thrive in international environments and navigate continuous digital transformation.

Learn more about the Nanyang MBA programmes here.

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