Blog

10 October 2018

Sustainable finance: what’s it got to do with accountants? By Vita Ramanauskaité and Eleni Kanelli

This is the first blog post of our sustainable finance series. Check out the second part here: Radical change to fight our environmental crisis 

 

Global goals for a greener planet

To keep Europe liveable for all 512 million of us, we will need a more sustainable economy. Having committed to the UN Sustainable Development Goals and the Paris Climate Agreement, Europe needs to fulfil an ambitious agenda by 2030. To this end, the EU launched a massive Sustainable Finance initiative to stimulate the €180 billion annual investment needed to merely achieve its energy and climate goals. This is part of the EU’s legislative efforts to establish a Capital Markets Union to which Accountancy Europe has steadily contributed.

Source: https://ec.europa.eu/info/files/180524-sustainable-finance-factsheet_en

 

How do accountants contribute?

Accountants provide transparency that is essential for the stability of Europe’s financial system and for moving from short-term investments to sustainable economic growth. What gets measured gets done, so accounting is a natural starting point. Measuring pollution, resource depletion and global warming will correct market failures, and this will drive a truly sustainable economy and should deter ‘greenwashing’. Businesses also perform better when they report on sustainability matters; they are more likely to identify long-term risks and build resilience into their business models.

Accountants contribute via their daily work­ in 3 primary ways:

  • Corporate reporting to cover long-term term risks: Financial performance is not enough to determine how a company will develop in the long run. Non-financial information, including sustainability information, plays an important role in mitigating the short-termism that until recently dominated financial analysis and valuation. Accountants can help companies connect, and eventually integrate non-financial and financial information.
  • Corporate governance to focus on long term value creation: With companies as the main driver for economic change and their key role in natural capital and geopolitics, accounting and measuring is a tool for to make businesses more sustainable. They help embed sustainability into a company’s strategy, decision making and reporting processes.
  • Auditing to provide trust to stakeholders: Accountants provide independent assurance to address stakeholders’ needs for reliable corporate information. They have the skills and abide by the high-quality global standards to increase trust. They enable businesses to achieve their sustainability objectives by identifying areas for improvement and enhance internal decision-making processes.

 

20 years of experience supporting sustainable financial growth

We have continuously advocated financing sustainable growth and supported long term investments for the past two decades. Next to our recent publication Sustainable finance. The accountancy profession’s contributions to EU strategy and our contributions on the Capital Markets Union, we have worked extensively on the following topics:

 

Related content

Blog7 ways accountants can help companies get more sustainable

24 April 2019

BlogRadical change to fight our environmental crisis

22 February 2019

BlogLooking back, moving forward: our sustainable future starts today

16 January 2019

EventEvolving needs of SMEs: the profession’s role?

24 October 2019

In the mediaManagement spotlight: Accountancy Europe’s quest to create one global reporting standard

19 August 2019

In the mediaNon-Financial Reporting: «…it is about staying in business»

14 August 2019

Consultation responseEFRAG’s questionnaire on equity instruments – research on measurement

22 July 2019

UpdateTax Policy

19 July 2019

BlogWhat has the EU achieved so far on tax?

19 July 2019

UpdateAudit Policy

12 July 2019

UpdateTax Policy

5 July 2019

UpdateSustainable Finance

27 June 2019

Consultation responseIAASB’s consultation on Extended External Reporting (EER) assurance

27 June 2019

UpdateTax Policy

21 June 2019

UpdateSME

20 June 2019

BlogBetter business decisions with assurance on non-financial information

20 June 2019

UpdateTechnology

17 June 2019

SpeechECA Sustainability Reporting 2019

17 June 2019

Publication10 ideas to make corporate governance a driver of a sustainable economy

12 June 2019

UpdateAudit Policy

11 June 2019

In the mediaStakeholders present their complaints on sustainable finance to next Commission

7 June 2019

UpdateTax Policy

7 June 2019

EventIs sustainable finance gender neutral?

3 June 2019

Sign up for our newsletter