Did you know accountants can drive the move to sustainability?

Sustainability is ensuring our own needs and wants are met without jeopardising the ability of future generations to meet their needs. It is being mindful that our actions have a direct impact on  Earth’s natural resources and therefore our actions can either help us and the future generations to thrive in a better world or result in suffering and rationing or deprivation of natural resources for survival.

Increased globalization and Industrialization over the years has accelerated global warming and therefore now more than ever, there is a need to act. Companies have a greater social and environmental responsibility to combat against climate change, and in doing so, are encouraged to account and report on sustainability matters which encompasses an array of issues around the environment, social impact and governance matters.

Often there is confusion revolving around what is the role of accountants in sustainability. 

Accountants play a vital role in not only reporting on sustainability but also in assisting companies to achieve their sustainable development goals. Accountants are better placed to provide insights as they not only have a financial background but also possess wider knowledge of the business operations including supply chains and customer market.

Accountants can help in the following way, to mention a few:

  • Identify risks associated with climate change and formulate risk management strategies by carrying out a scenario analysis for all the possible outcomes and designing risk mitigating solutions.
  • Gather information on environmental and socially related expenditure and link them to financial benefits.
  • Highlight the long-term benefits of sustainable methods, for example improved resource efficiency, cost savings resulting in increased sales due to improved market reputation

Greenwashing has become a major challenge in recent times where Companies deceive their customers into believing that the Company’s products and policies are environmentally friendly.

  • Assist in sustainable reporting by drawing on their expertise from financial reporting and also report on non-financial issues highlighting the environment, social and governance (ESG) goals and the progress made.

Accountants have a duty to serve the public interest and uphold the public trust in the profession and therefore they can provide reliable and trustworthy information to enable the stakeholders to make informed decisions.

Corporations are focused on being profit-oriented without acknowledging the adverse impact on the environment and for many years, some business processes have been unsustainable.

Business ethos generally need to change inorder to strike a fine balance between profitability, stakeholder needs, environmental safety and sustainability. There is also an increased demand by various stakeholders including potential investors emphasising corporates to quantify and control their carbon footprint, make a social impact and practice good governance.

In the grand scheme of things, accountants are part of the solution the business world needs. Companies will require the help of accountants to drive their businesses toward more sustainable practices and collectively make a change for a bright future.