The Asean region is set to be the world’s fourth-largest economy by 2030, but its economic growth faces severe climate and nature risks, according to a new report.

Up to 35% of the region’s GDP could potentially be affected, while climate migration may be in the millions and labour productivity may face significant challenges from heat stress, the Association of Chartered Certified Accountants ( Acca ) says in its new regional report, Sustainability Reporting in Asean: An Overview of Current Development.

Such risks will have global repercussions because Asean is a major trading region, and it possesses a rich biodiversity. It is home to a third of the world’s mangroves and seagrass ( important carbon sequestrators ), 80% of international aquaculture production, and 15% of the planet’s forestland.

“How Asean responds to sustainability risks and opportunities is important in ensuring investor confidence and driving accountability,” the report says. “This emphasizes the vital importance of high-quality sustainability reporting to foster trust and enable sound decision-making by investors and other stakeholders.”

Common set of standards

In this regard, the international professional accountancy body is urging policymakers and regulators in the region to adopt a common set of global sustainability standards, namely the IFRS ( International Financial Reporting Standards’ (IFRS ) Sustainability Disclosures Standards issued by the International Sustainability Standards Board ( ISSB ).

At the same time, Acca is calling for proportionality of reporting requirements to achieve high-quality and practical reporting that addresses the diverse needs of the stakeholders, while allowing for scalability.

It is also advocating for adequate representation on the ISSB’s board, consultative bodies, and other relevant bodies to ensure the voice of Asean businesses and governments is heard to influence global policymaking and standard-setting.

“This is especially important given the size of the Asean economy and the disproportionately high risks it will likely face on climate, nature and societal issues,” the report says.

Acca recommends developing national roadmaps for ISSB implementation, establishing regional infrastructure for data sharing and sustainability disclosures, and strengthening professional education and capacity building for sustainability reporting.

“Encouragingly, Asean member states – Indonesia, Malaysia, the Philippines, Singapore and Thailand – account for approximately 85% of regional GDP and have already signalled their intention to align with the IFRS Sustainability Disclosure Standards developed by the ISSB. This represents a critical step toward comparability, credibility, and trust in sustainability-related information that will enable decision-making at all levels,” the report notes.