Accountancy and finance professionals are well-placed to take on the role of sustainability reporting, according to a joint study by digital automation and energy management company Schneider Electric and the Institute of Singapore Chartered Accountants (ISCA).
According to the "Counting to 3: Navigating Singapore’s Emissions Journey Together" report, as corporate reporters, accountants already have fundamental skills in financial reporting.
They are also familiar with applying accounting standards and ensuring that reporting is transparent, verifiable, comprehensive, independent, and fair.
In addition, accountancy and finance professionals are proficient in data collation and analysis to provide meaningful explanations for informed decision-making. These skillsets are transferable to sustainability reporting, including Greenhouse Gas scope 3 reporting.
The study, which looks into the perspectives of over 500 of Singapore’s senior business leaders involved in sustainability strategies for their organisation, comes ahead of new requirements for all listed companies and large non-listed companies in Singapore to make climate-related disclosures from 2025 and 2027, respectively.
It found that 94% of Singapore organisations are not fully measuring and analysing Scope 3 emissions, thereby affecting their readiness to report.
Respondents cite the correlation between greater seniority and greater knowledge exists due to senior executives having increased access to briefings on emissions management and strategies.
However, the importance of knowledge being equally distributed across all functions and divisions within organisations was also emphasised, as change management programmes require both strategic understanding coupled with capability to implement the step changes needed for Scope 3 reporting requirements in Singapore.
"Sustainability is a megatrend that is reshaping the accountancy profession," says Kang Wai Geat, divisional director, Professional Standards at ISCA. "Increasingly, organisations are turning to the accountancy profession for sustainability reporting and assurance. To take full advantage of the opportunity to help organisations advance their emissions agenda, accountants must upskill and reskill to keep up with the latest developments in sustainability."
Knowledge deficits linked to inaction
While 76% of business leaders say they have completed feasibility studies to better understand their organisation’s readiness to measure, report, and manage its Scope 3 emissions, only 6% say their organisation is fully measuring and analysing Scope 3 emissions, lagging significantly behind Scope 1 (52%) and Scope 2 (30%) emissions.
As a result, the report says confidence in meeting their Scope 3 emissions targets is significantly lower, with only 27% believing these are highly achievable, compared to 40% for Scope 1 and 31% for Scope 2 emissions.
Leaders from larger businesses are significantly more likely to indicate they have set targets for Scope 3 (54%) compared with those at small businesses at 31%.
In further findings, only 32% believe their organisation’s net zero targets are achievable, but in a show of optimism 64% of those whose organisations have not yet set emissions targets believe they should have done so. Business leaders who adopted science-based targets (SBTis) were more likely to drive meaningful action within their organisations, helping define a clear and credible path to sustainability success.
Four groups of organisations
The report identifies four groupings of organisations in Singapore in relation to progress around managing Scope 3 emissions and the degree of management required: High Adopters (10%), Moderate Adopters (30%), Low Adopters (38%), and Emerging Adopters (22%).
From this analysis, the industries in Singapore identified as containing the highest proportion of High and Moderate Adopters combined are Consumer Goods, Energy & Mining, Healthcare & Pharmaceuticals, Financial Services, and Engineering & Construction.
Key barrier to progress
Overall, a lack of human and financial resources, commercial motivation, and access to fit-for-purpose technological infrastructure are highlighted by respondents as the top barriers to progressing Scope 3 emissions reduction agendas and initiatives.
However, there are differences in impact, based on segment status. For instance, while High Adopters and Moderate Adopters identify a lack of human resources or expertise as the biggest barriers to reducing Scope 3 emissions, Low Adopters and Emerging Adopters cite a lack of technological infrastructure as the biggest.
