Sustainability as ASEAN’s strategy, advantage in global trade

For ASEAN, sustainability has shifted from being a requirement to a strategy for trade readiness and long-term growth in diverse economies.

ASEAN’s economies have long been fuelled by dynamism and export-driven trade, a model that has underpinned the region’s rapid growth. Today, however, modern global markets require sustainability reporting to demonstrate transparency and credibility across supply chains. As a result, what was once viewed as a compliance task has become a strategic tool that enables continued market access and strengthens ASEAN’s competitive edge.

“Across the region there is a decisive shift: markets moving from ‘reporting to comply’ toward ‘reporting to compete,’” explained ACCA Public Affairs Manager George Thomson in an interview with Singapore Business Review. “Businesses increasingly recognise that transparent and comparable disclosures are essential to attract sustainable investment and maintain trade access.”

This transformation extends to governments as well, with national frameworks being realigned with the International Sustainability Standards Board (ISSB) standards. ACCA’s Sustainability Reporting in ASEAN study explains that more than a technical adjustment, this alignment has become a differentiator that enhances market confidence and regional integration.

Currently, countries accounting for 85% of ASEAN’s GDP have publicly aligned with ISSB standards,underscoring the region’s proactive stance. Instead of waiting to be told what to do, ASEAN economies are taking steps to shape sustainable finance systems that meet global expectations.

This approach, Thomson emphasised, reduces uncertainty for investors whilst also building a platform for cooperation for regulators. 

“In practice, it signals that ASEAN is ready to participate in, and help shape, a global marketplace that values accountability and transparency,” he added.

The EU effect and the risk of a two-speed sustainability economy

ASEAN has also been exerting effort to align with European Union (EU) expectations, considering that the latter’s regulatory mechanisms such as the Carbon Border Adjustment Mechanism (CBAM) and the Corporate Sustainability Reporting Directive (CSRD), have been setting new benchmarks for global supply chains.

“For ASEAN exporters, especially those in carbon-intensive sectors, readiness is now a trade prerequisite,” Thomson said. “Compliance with international disclosure and assurance standards signals reliability to investors and buyers in Europe.”

The harmonisation between ASEAN’s national frameworks and international standards, although a challenge, can help businesses demonstrate equivalence with EU expectations, Thomson added. 

But amidst an overall trend towards progress, risks remain. Effective regulation requires practical implementation and an investment in skills. If the region fails to close assurance and capability gaps, there is the risk of a “two-speed sustainability economy” where advanced markets attract green capital whilst smaller or emerging economies fall behind. 

Thomson stressed that this weak assurance would undermine the trust that drives investment. To address this, there should be proportional assurance frameworks along with strengthening the capacity of small and medium accounting practices to support local clients.

Accountants as architects of trust

The process of turning sustainability data into credible insight for investors and regulators relies on the capable hands of accountants. They have the expertise in validating metrics, integrating ESG into performance management, and providing assurance that enables informed decisions.

Accountants’ blend of technical expertise, ethical grounding, and independence transforms sustainability data into decision-useful insight, which ensures that sustainability is not just reported but believed.

As the economy continues to become increasingly interconnected, ASEAN’s ability to turn sustainability to an advantage will determine its place in the next phase of global trade integration.

Looking ahead, Thomson offers a clear message to policymakers and businesses: “Sustainability is the new currency of trade,” underscoring how ASEAN’s competitiveness depends on its ability to harmonise standards, invest in human capital, and strengthen assurance capacity.

“The choice is clear: treat sustainability as compliance and risk being left behind, or embrace it as a strategy and lead the next phase of global trade integration,” he added. 

Proportionality and shared learning

As ASEAN’s diversity is its strength, sustainability frameworks must reflect that by focusing on consistent principles rather than identical templates. 

As part of Malaysia 2025 ASEAN chair year, ACCA worked with the ASEAN Business Advisory Council on a report that sets out how ASEAN can move towards an aligned regional position, using ISSB standards as a common baseline whilst allowing national priorities to be layered on. At national and implementation level, ACCA can then support partners by mapping local frameworks against ISSB, developing proportionate reporting guidance, and creating training modules for finance professionals so that policy ambition translates into practice. As Thomson notes: “For ASEAN, the opportunity is there. The opportunity is clear: a coordinated regional approach will unlock durable trade competitiveness.”