We already see the consequences global temperatures rising 1 degree: extreme weather events, rising sea levels and diminishing Arctic sea ice. Businesses are instrumental to secure our planet’s survival. This blog sets out how accountants can help them transition towards a long-term sustainable strategy.
Businesses can no longer prefer short-term wins over following a sustainable strategy, especially as EU policymakers have started an ambitious legislative push towards a more sustainable economy. Read more on what accountants have to do with the EU agenda in the first blog of our sustainable finance series.
If businesses want to keep thriving, they need to adapt their strategies towards long term success in financial and non-financial terms. They need to identify where they create or destroy value and adapt their strategies accordingly.
Accountants can be a strategic partner for companies’ transition towards a more sustainable future. Read more on how accountants measure corporate environmental footprint, disclose those results and add credibility so those results are reliable in our second sustainable finance blog.
But how can companies benefit from these skills in practice? Here are 7 ways accountants can deliver on helping companies get more sustainable:
1. Provide better corporate information
Accountants can help improve how a company communicates with its stakeholders by innovating how it reports, for example by using the integrated reporting <IR> framework. Reporting should disclose relevant financial and non-financial information (such as on environmental, social and governance matters (ESG)), Accountancy Europe has explored the future of corporate reporting and promotes presenting corporate information via a Core & More approach. This involves focusing on what really matters and linking financial and non-financial information in corporate reports.
2. Provide independent assurance
Independent assurance is key to ensure if information is trustworthy – and thus to prevent greenwashing. Accountants have the skills to audit companies independently and provide assurance on their sustainability processes. Accountants report on the organisation’s material weaknesses and offer insights on long-term business implications. They enhance the organisation’s internal decision-making process and hence its ability to achieve sustainability objectives.
3. Assign costs to negative impacts on the environment and society
Accountants can help assessing the real cost that corporate activities generate. For example, smartphones can be extremely polluting, and fast fashion can result in human rights violations in the production process: these impacts come at a cost to society and need to be transparent.
4. Encourage ESG goals
Accountants can help businesses embed sustainability throughout, from formulating strategy to improving processes and measuring performance. And accountants need to comply with international standards for their ethical behaviour, including integrity, objectivity, and professional competence and due care.
5. Help businesses implement ESG regulations
Accountants can help comply with existing laws and prepare for upcoming legislation. The EU and national legislators require businesses to consider ESG factors more. Accountants offer strategic advice on these obligations and provide roadmaps to help companies, especially SMEs, adapt.
6. Perform on-the-ground monitoring and measuring
Accountants can support the company with improve business processes and ensure that companies take a long-term view with the business choices that they make. This includes evaluating or auditing processes and ensuring that companies avoid short termism.
7. Identify ways to reward sustainable policies
Accountants can ensure that a company gains benefits from its sustainable practices by enhancing employee retention, customer satisfaction, aligning remuneration on sustainability targets or applying for funding and subsidies that help companies become more sustainable.