SINGAPORE – Often overlooked, number-crunching accountants play a key role in helping companies, especially smaller ones, thrive in the green economy and decarbonise, said Minister for Sustainability and the Environment Grace Fu.

Accountants act as the bridge between finance, operations and the markets.

“With green financing and carbon credits happening, these require reporting, measurements, assurance and verification,” Ms Fu said, speaking at a dialogue organised by the Singapore Business Federation and Institute of Singapore Chartered Accountants (Isca) on March 12.

The dialogue, held at the SGX Centre, delved into the implications that global climate developments and recent Budget announcements have for businesses here.

The minister, who has a background in accountancy, added: “For the accounting profession, it feels like a wave that is sweeping through (right now)... having more reporting requirements and deadlines ahead of us. And, worse still, the standards are still evolving.”

Ms Fu was referring to the recent announcement that requires all listed companies to make climate-related disclosures from 2025, aligned to requirements set out by the International Sustainability Standards Board. This requirement will expand to include large non-listed companies from 2027.

Climate disclosures are documents that organisations publish to outline the carbon footprint of their activities and their exposure to climate risks. 

The panel included Professor Winston Chow, a climate scientist at Singapore Management University, and Dr Bicky Bhangu, president of South-east Asia, Pacific and South Korea at Rolls-Royce. It was moderated by Ms Fang Eu-Lin, who chairs Isca’s sustainability and climate change committee.

The panellists were asked how accountants can play a role in their companies’ sustainability teams.

Instead of feeling bogged down by additional responsibilities of environmental, social and corporate governance (ESG), Ms Fu encouraged accountants to grasp these as opportunities.

She said: “I was a little bit surprised when I heard from some friends that the accountants are fighting this. They are saying, ‘I’m not trained to do this, employ someone else to do this. Why are you giving more work?’

“This is a chance for you to widen your scope, double your value-add, raise your fees, and (eventually) be a chief financial officer and chief sustainability officer.”

Ms Fu added that there is no running away from having sustainability matters folded into accountants’ work. While they are asked about financial numbers now, they will eventually also be asked about carbon numbers.

Isca, for instance, has sustainability certifications to help accountants and other professionals master skills needed for climate reporting.

On the topic of upskilling, Prof Chow stressed that the move to a green economy should not leave people behind, and expanding SkillsFuture can help to prevent that.

In the recent Budget statement, it was announced that a $4,000 SkillsFuture credit top-up will be given to Singaporeans aged 40 and above in May. The credit, which will not expire, can be used for about 7,000 part-time and full-time courses designed to generate better employability outcomes.

“How you retrain people who might lose out from the older brown economy and bring them into the fold for the green economy is massively underrated, but it contributes to climate action based on sound science,” noted Prof Chow.

Referring to Singapore’s aim to phase out vehicles that run purely on petrol and diesel by 2040, Ms Fu added: “If you’re running a small mechanic shop servicing internal combustion engine cars, in 20 years’ time you won’t get (such) cars in Singapore.

“How do you retrain your mechanics? It’s a different type of skill set.”

The role of small and medium-sized enterprises (SMEs) was also heavily discussed on March 12, and one question touched on how SMEs can get started on their climate disclosures and sustainability journey.

Ms Fu encouraged accountants and sustainability professionals to visit SME centres under Enterprise Singapore with their bosses to receive support and ESG consultations.

Noting that SMEs would be facing higher utility bills from the trickle-down effects of the hike in carbon tax – which is $25 per tonne of emissions, up from $5 previously – Ms Fu said one of the first things a company can do is reduce its energy consumption.

Increasingly, the public sector is also looking to do business with and procure greener services, and SMEs without a sustainability framework or eco-friendly products may lose out.

There are perceptions that SMEs tend to lag behind in ESG efforts, Ms Fu said. “In fact, the SMEs are where new technologies are being housed and new investments are coming up. We hope to see more SMEs coming up to help us decarbonise and grow,” she added.

Ms Fang, the panel’s moderator, chimed in: “Maybe SMEs should not be called small and medium-sized enterprises, but ‘sustainable and mighty enterprises’.”