If you run finance for a company in South-East Asia, it is tempting to look at the wave of sustainability-reporting rules - Europe's CSRD, the ISSB's global standards, the US SEC's on-again-off-again climate rules - note that none of them directly names you, and move on. That would be a mistake.
The pressure to produce credible sustainability numbers rarely arrives first through your local regulator. It arrives through the people who fund you and the customers who buy from you - and it lands on the finance function.
A recent Strategic Finance article by Tim V. Eaton and Bridget Schaber describes finance and accounting professionals as “agents of change” in this shift - not because sustainability is fashionable, but because the reporting now has to withstand the same scrutiny as the financial statements. The authors cite a PwC survey in which 79% of investors called a company's management of ESG risks and opportunities an important factor in their decisions, and 49% said they would be willing to divest from businesses not taking meaningful action.
The reach of Scope 3 emissions - the indirect emissions across a company's value chain - is what turns that investor pressure into everyone's problem. When a large buyer or a listed group starts reporting its Scope 3 figures, its suppliers inherit the data request whether or not any law names them. Demand travels down the chain long before regulation does. Disclosure is already trending that way: the authors cite a Wall Street Journal survey finding 63% of companies disclosed ESG information in 2023, up from 56% the year before.
The same pressure runs the other way for investors. Funds and family offices increasingly expect these disclosures from the companies they back, which means the quality of a target's sustainability data is quietly becoming a diligence question.
The most revealing figure in the piece is a quieter one. In the same PwC survey, only 54% of respondents agreed that board directors had sufficient knowledge of ESG issues. That is the real bottleneck. The intent is largely there; the capability to produce reliable, auditable sustainability numbers is not.
This is where the work stops being a communications exercise and becomes a controls exercise - data definitions, source systems, sign-off, an audit trail. Familiar territory for anyone who has closed a set of books. In practice, the authors argue, that means finance teams building the expertise to translate ESG metrics into financial insight, working alongside sustainability, HR and supply-chain colleagues, wrapping the numbers in proper internal controls, and using data analytics to lift data quality.
None of that is solved by waiting. It is solved by getting the underlying data and controls into shape before someone external - an acquirer, a lead investor, an anchor customer - asks to see them. For most founders and smaller funds, that does not warrant a dedicated sustainability hire; it warrants finance discipline applied to a new class of data. That is one reason we treat sustainability reporting support as part of the finance function at DualMinds, rather than a bolt-on.
The standards will keep moving. The safer move is to treat sustainability data the way you already treat financial data - measured, controlled and ready to defend - well before anyone requires it of you. The businesses that get asked first are rarely the ones given time to prepare.
Source: Driving Sustainable Change: The Path Forward - Tim V. Eaton and Bridget Schaber, Strategic Finance (November 2024).
