ACCA: Green Budgeting To Help Achieve Sustainability Goals

The Association of Chartered Certified Accountants (ACCA) has urged the Malaysian government to use green budgeting to achieve its sustainability goals.

ACCA has encouraged the government to adopt green budgeting in the upcoming revised Budget 2023 to enable the country to achieve an environmentally sustainable economy and fulfil its commitments against climate change.

The association has released a Professional Insights report called “Green Budgeting: A Toolkit for Public Sector Finance Professionals”, which sets out the reasons for considering green budgeting and the methods that can be adopted.

The toolkit also outlines the basics of green budgeting and the role of finance professionals in turning goals and ambitions into tangible plans. ACCA believes that green budgeting is an approach that integrates climate change and environmental considerations into budget processes and decision-making.

“Political will, especially at the outset, is a crucial enabling factor for green budgeting to succeed. While the process is often initiated by officials, securing support from the political leadership of the government will ensure this approach is more likely to take root.

“We know that public sector organisations face resource constraints, which have only increased since the pandemic. However, green budgeting does not require costly new systems or extensive external support. Most green budgeting practices can build on existing systems and processes, and still allows policymakers to align budgets more closely with their climate change and sustainability goals.

“Nevertheless, for green budgeting to be effective, it must be adopted at different levels of the public sector. Implementing this at every level of the public sector will help the government develop a coordinated approach, enabling all organisations to share good practice and provide opportunities to innovate,” says Andrew Lim, Portfolio Head, ACCA Maritime Southeast Asia.

The Association sees climate change as the defining challenge of the present generation, affecting lives and livelihoods worldwide each year. The Malaysian government aims to reduce its greenhouse gas emission intensity by 45% by 2030 and become carbon neutral by 2050.

It also believes green budgeting will help the government remain on track to achieving its goals. The toolkit includes case studies from public sector organisations across the world that have implemented green budgeting approaches, highlighting examples from Singapore, London, Canada, Kenya and Odisha, India.

It notes that finance professionals must be at the centre of green budgeting approaches in public sector organisations, and professional accountants’ skills equip them to support their organisations in implementing green budgeting.