New technology to tackle new challenges: How accountants can harness technological innovation for sustainability

In the evolving landscape of corporate sustainability, the accountancy profession is playing an increasingly pivotal role. Emerging technologies are transforming traditional accounting practices, enabling accountants to contribute more effectively to sustainable business practices.  

From automation and AI to data scooping and mining, these innovations are not only enhancing efficiency but also ensuring greater transparency and compliance in sustainability reporting. As businesses face growing pressure from stakeholders to demonstrate their environmental and social responsibility, accountants equipped with these advanced tools can provide the critical insights and data-driven strategies needed to meet these demands.  

Advanced analytics are becoming indispensable for accountants tasked with sustainability reporting and compliance. These tools enable the analysis of vast amounts of data in real time, providing critical insights into a company’s environmental and social performance. For accountants, this means they can offer more accurate and timely information, which is essential for informed decision-making and strategic planning.

Commenting on the rise in demand for such solutions in the Latin America region, San Martín said, “Clients in Latin America are increasing their demands for sustainability reporting, green finance, and assurance. The European CSRD initiative involving the supply chain has had an additional impact since companies operating in Europe and components of European groups in Latin America have to report following these standards.

“An additional push in this demand comes from the local awareness, especially coming from young people, looking into sustainable products and services meaning that even for marketing purposes sustainable reporting and assurance is needed. Our sustainability area of professional practice experienced a double-digit growth during the last eight years.”

One of the key benefits of advanced analytics is real-time reporting. By continuously monitoring sustainability metrics, accountants can quickly identify and address issues, ensuring that companies remain on track to meet their sustainability goals. This proactive approach not only improves operational efficiency but also demonstrates a company’s commitment to transparency and accountability.

Advanced analytics also play a crucial role in ensuring regulatory compliance, a fact noted by San Martin. On this, he said, “Environmental regulations are continually evolving, and staying compliant can be challenging. Analytics tools can automatically track changes in regulations and adjust reporting processes accordingly, reducing the risk of non-compliance. This capability is particularly valuable for multinational corporations that must navigate a complex landscape of regional and international standards.”

Moreover, advanced analytics enhance the depth and quality of sustainability reports. Commenting on this, San Martín said: “By integrating data from various sources, these tools provide a comprehensive view of a company’s sustainability performance. This holistic approach enables accountants to deliver more detailed and meaningful reports that meet the growing demands of stakeholders for transparency and accountability.”

In the realm of accountancy, Artificial Intelligence (AI) and Machine Learning (ML) are revolutionising how professionals handle data and perform routine tasks. By automating repetitive processes, AI and ML allow accountants to redirect their focus from mundane activities to more strategic, value-added functions. This shift is crucial as companies increasingly prioritise sustainability and need accountants to provide critical insights into their environmental and social performance.

Commenting on this, San Martín mentioned: “AI-powered tools can handle tasks such as data entry, transaction categorisation, and anomaly detection with speed and precision far beyond human capabilities.” This not only enhances efficiency but also reduces the risk of errors, ensuring more reliable financial data. For instance, machine learning algorithms can swiftly analyse vast datasets to identify trends and patterns related to sustainability metrics, such as carbon emissions, waste generation, and resource consumption.

San Martín further noted: “AI can significantly improve the quality and depth of sustainability reporting. Advanced analytics enabled by these technologies allow accountants to generate real-time insights and forecasts, which are essential for proactive decision-making.” By leveraging AI and ML, accountants can provide more accurate and comprehensive reports that meet the growing demand for transparency and accountability from stakeholders.

The adoption of these technologies will facilitate better regulatory compliance by continuously monitoring changes in environmental regulations and automatically updating reporting processes accordingly. This ensures that companies remain compliant with the latest standards, avoiding potential fines and reputational damage. The integration of these technologies will be crucial in the years to come, a fact noted by San Martín when assessing the needs of clients around the globe, who further noted that “several countries in Latin America have adopted or are in the process of adopting IFRS S1 and S2, a process which is expected to accelerate in the next couple of years”.

When asked about how firms can invest in the adoption of these technologies and solutions, San Martín referred to SMS Latinoamerica’s experience and strategy, stating: “The first investment we made was in capacity building. We use Moodle as an educational platform that permits us to facilitate multimedia learning through SMS Business School. This has become a good learning platform for our own team, clients and colleagues.

“We strongly believe in sharing knowledge with the broader profession. We are convinced that, being the only international network based in Latin America, we have a role in spreading knowledge. We partner with European organisations, permitting us to offer certifications. Other investments we have made relate to the adoption and integration of data engine platforms facilitating data mining and scoping.”

Incorporating emerging technologies is transforming the accountancy profession, enabling accountants to play a critical role in corporate sustainability. AI and ML enhance efficiency and accuracy, allowing for strategic focus and improved reporting. Blockchain ensures transparency and security, bolstering the credibility of sustainability data. Advanced analytics provide real-time insights and ensure regulatory compliance, supporting proactive decision-making. Together, these technologies equip accountants with the tools needed to meet the growing demands for sustainable business practices, ultimately driving organisations towards more responsible and transparent operations.

Main image: Pablo San Martín President, SMS Latinoamérica president