Supplement issue 3
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The positive impact of pursuing SDGs
Public and private sector organisations globally are recognising that business growth relies on politically and environmentally stable economies and that government regulators and commerce must function in tandem to keep social systems safe and to plan and risk-manage for a sustainable future. Environmental, Social and Governance (ESG) strategies are about planning sustainability objectives and practices in all areas across business life. The motivation is manifold and investment decisions come into play accordingly, as each stakeholder comes to terms with which long-term strategies to prioritise.
Sustainability can no longer be ‘siloed’ as an independent thought or function; rather, that all ensuing strategies and processes need to be integrated and remain core in driving business units. The consensus suggests that all shareholders, consumers, employees, business leaders and governments need to shift gear and deliver profits with purpose i.e. creating social value through their commercial activity. A good example of this are the initiatives striving for sustainability whilst confronting climate change as per the Paris Agreement; the question being how will commercial organisations help meet the stated aim of a global reduction in CO2 emissions of 45% by 2030 or net zero by 2050, and still ensure growth and profitability?
It’s agreed that mapping of collected data is becoming key to setting and underpinning sustainability targets, to take meaningful actions. This means transparency, traceability, monitoring and reporting are urgent priorities to build a truly sustainable business. Critical first steps are for quality improvements in supply-chain data that can make assurances about the sourcing and security of raw materials that trace a product’s journey to point of sale. Simultaneously, sustainability through Diversity, Equity and Inclusion (DEI) initiatives cannot be a one off because these are deemed to extend beyond recruiting and incentivising a mix of diverse supplier segments but must also encompass fair labour commitments and be deliberate on modern-day, anti-slavery legislation. Sustainability programmes are committing to broaden the equity and inclusion for employee and citizen participants, and to create far reaching food and environmental security for the planet. By any measure, a tall order with governments and corporates on different points of that journey.
Throughout this International Accounting Bulletin’s ESG 2022 edition, IAB’s networks, associations and industry partners demonstrate their Thought Leadership with Commentary, Q&A’s and case studies highlighting their views, intent and formulation of policy frameworks to get behind their sustainability agendas. Much of the work is in collaboration with their member firms, to advocate for tightening audit standards, select and train accountants to serve future clients’ needs and to implement programmes that will align with good practices and UNSDG goals, that appeal to a new generation of employees, shareholders, and customers.
Features look at business challenges around how organisations have decided which opportunities and issues to prioritise, where to invest resources and time to drive the greatest sustainability-impact across people, processes and supply chain and, significantly, how they plan for the best and most cost-efficient practices to reduce their carbon footprint. What is clear is a show of collective intent to implement sustainability strategies by public and privates sector players, either due to regulatory obligation or shareholder and customer demand, or in most cases, both these motivators.
In this issue, Dr. Martin Farrar of AICPA&CIMA discusses the importance to corporates of Carbon Accounting to bring consistency, reliability, and coherence to the profession, in a bid towards reaching net zero targets and reporting. Academics write AICPA&CIMA’s case study on the benefits of Natural Capital Accounting that integrates natural resources data with economic analysis; Heads of Practice from BKR International discuss their respective ESG programme roll – outs and journeys; HLB International’s Bettina Cassegrain provides Thought Leadership on sustainability reporting standards and the case study explores how its LA based firm GHJ, has embedded a more inclusive environment into their workplace and embraced the essence and purpose of corporate social responsibility (CSR); Talking Heads at Kreston Global’s firms discuss the need to work as businesses that contribute to thriving communities and the case study offered by its firm Kreston Reeves, describes the positive impact of pursuing SDGs in reducing inequalities in the workplace and improving health and wellbeing by tracking a colleague’s paternity leave experience; an expert from Russell Bedford Brazil talks about the benefits of new regulations to strengthen the ESG agenda on a national level; in a research study of FTSE100 company audit reports, Richard Murphy FCA, Professor of Accounting Practice, Sheffield University Management School cautions accounting leaders that organisations are failing to take climate change seriously and offers advice on ways forward. In June 2022, SaveMoneyCutCarbon and ICAEW announced a partnership that provides a digital marketplace to help accounting firms in tackling their carbon neutral status.
I also interviewed Julian Costabile, Partner, Sustainability SMS Latinoamérica about the organisation’s investment into supporting ESG advisory to clients, sustainability training and Integrated Reporting’ in LATAM’s markets. The case study highlights trends and innovative products that are on offer for Green finance.
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