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The Sustainability & ESG Imperative for the Accounting and Finance Profession

Apr 15, 2024 · 3 min read · AICPA & CIMA Insights Blog

Accounting and finance professionals have the critical expertise needed to weave sustainability initiatives seamlessly into business objectives, fostering organizational success and environmental stewardship. Understanding and integrating sustainability standards is crucial as the reporting landscape is progressing rapidly. The urgency for both public and private companies to adapt has never been greater. You can take the lead on integrating sustainability into your operational ethos. Explore five steps to take before launching a sustainability reporting plan across your organization.

Last year, sustainability standards were on the horizon. Now they have arrived.

The SEC rules have been finalized and the ISSB and EU standards went into effect on Jan. 1, 2024. In addition, California has passed laws requiring sustainability disclosures for public and private U.S. companies, and the IFRS Foundation’s International Sustainability Standards Board (ISSB) issued two standards, IFRS S1 and IFRS S2, last summer, designed to form a global baseline for sustainability disclosure.

Reporting requirements are a clear call to action, but they shouldn’t be the only reason to consider sustainability.

As an accounting and finance professional, you can help ensure that organizational objectives and practices contribute to both business success and the well-being of our planet.

Here are five steps to take before implementing a sustainability reporting plan across your organization:

1. Understand sustainability standards and reporting requirements

Applicable rules and regulations will depend on the geographical footprint of your business operations. You’ll want to understand rules and regulations regarding initiating ESG initiatives, articulating the metrics and process for measuring, establishing adequate internal controls and knowing how and when the company will disclose the information to the public.

2. Perform a materiality assessment

Identify the sustainability-related risks and opportunities for your organization that will require a materiality assessment and sector-specific research.

To identify risks and opportunities, engage with investors, executive leadership, customers, third-party vendors, employees and the communities in which you operate. This research will shed light on how organizational resources, relationships and performance constitute the dynamic ecosystem of your company, allowing you to carefully consider each aspect as you collaborate and advise on your company’s sustainability initiatives.

3. Incorporate sustainability into your business model

Reporting requirements will shape the way your organization defines, creates and governs ESG and sustainability initiatives in its business model. Establishing your organization’s approach to ESG and sustainability could involve adjustments to business operations, including suppliers, labor costs, waste management and more.

4. Seek outside expertise as needed

Minimizing your organization’s effect on the environment may require engaging with outside experts, such as climate scientists. Your initial assessment with a variety of stakeholders could highlight where additional expertise is required.

5. Foster a work culture toward sustainability

When you communicate your organization’s ESG initiatives and objectives with staff, you connect sustainability with the broader purpose of your organization.

Guidance from the Integrated Thinking Principles of the IFRS Foundation can get you started.

Businesses everywhere are adopting sustainable business practices. You have a unique opportunity to guide leaders and transition business operations toward a more sustainable future.

Learning programs:

The University of Oxford Saïd Business School and AICPA & CIMA Executive Management Program in Sustainability for Accounting and Finance

This exciting new program will launch in September 2023 and provides access to the world-class teaching of the University of Oxford’s Saïd Business School and AICPA & CIMA through an e-learning program multiple times a year. This partnership between the world’s most influential accountancy institute and the world’s most prestigious university provides an unrivaled opportunity for senior accountants and business leaders to develop a deep understanding of how sustainability issues are shaping the very nature of business in the twenty-first century. Access a 10% discount code by visiting the course page.

Fundamentals of ESG Certificate will kickstart an understanding of core ESG issues and the current regulatory and reporting environment.

Fundamentals of Sustainability Accounting (FSA) Credential®

AICPA & CIMA is the first international professional accountancy body to make the FSA Credential available to its 700,000 members and students at a discounted price. AICPA & CIMA believes that professional accountants who undertake the program of study and examinations of the FSA Credential will acquire key competencies to integrate sustainability into enterprise strategy and operations. They will also build the capability that enables accountancy professionals be at the forefront of leading and guiding their organizations to sustainable success and long-term value creation.

Ash Noah, CPA, CGMA, FCMA

Ash Noah is Managing Director, CGMA Learning, Education and Development, at the Association of International Certified Professional Accountants.

In this position, Ash leads the Research, Examinations and Product Development for the Management Accounting Unit.

His primary responsibility is to ensure that the Association’s Finance Competency Framework, Syllabus, Examinations and Learning solutions are effective and remain relevant to the practice of Management Accounting. Ash works closely with Finance Leaders globally, identifying the trends impacting the finance profession.

Ash was the CFO for the International Unit of TNT global express logistics provider and has led finance transformation in teams across 45 countries. He is a licensed U.S. CPA, a Chartered Global Management Accountant (CGMA) designation holder, and a Fellow of the Chartered Institute of Management Accountants (CIMA).

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