Role of accountants
Sustainability needs to be measured, reported and assured. These areas of expertise fall naturally under an accountant’s remit. Good quality information that is trusted and properly targeted is vital to sustainable development.
Business need to modify its behaviour on the basis of information. Accountancy information can provide feedback on performance which guides management decisions about the future.
ICAEW's thought leadership publication Sustainability: the role of accountants (PDF) outlines these concepts in more detail and our thought leadership prospectus Sustainable Business takes the debate forward. The publication uses a framework to examine what mechanisms can exert pressure on business and steer market activity towards more sustainable behaviour.
As consensus builds that companies should be more accountable for their impact on society and the environment, the profitability of companies who ignore the views of their stakeholders is threatened.
Ultimately, the medium of exchange through which these views are communicated is money: falling share price, loss of earnings, increased costs and taxes, and so on.
Debate has moved beyond the belief that the responsibility lies with governments to legislate on these issues. The predominant view now is that organisations need to operate in a proactive way, pre-empt sustainability issues before they arise, and find new business opportunities in this changing environment.
The successful functioning of these mechanisms depends on the availability of accurate and reliable information and on assurance of this non-financial data. Accountants are experienced in providing information and assurance and as business decision-makers. They are also involved in devising company strategy. Chartered accountants could expect to be involved in a huge range of activities, including:
- Implementing energy efficiency (and thereby cost-saving) measures
- Formulating and implementing corporate responsibility policies
- Designing management information systems – eg around tradable permits and carbon emissions
- Assurance of supply chain processes and procedures
Watch our webcast addressing the issues facing accountants and their role in business sustainability. Richard Spencer, Head of ICAEW Sustainability, draws on the thought leadership report Sustainability: role of the accountant.