We can all make a difference to the world in our own lives, and our communities and organisations. What that change looks like, what it amounts to, will differ for everyone, because individuals and businesses are all different.
For us at ACCA, the way we seek change is summarised in an initiative that we call Accounting for a Better World – which helps us tell a powerful story of how the accountancy profession benefits societies and economies, and how it responds to the many challenges facing the world today.
This important initiative says so much about how our members play their part in building a better, more sustainable planet for all.
Perfect storm
In an age of upheaval, it’s more important that professionals – like ACCA members and readers of this journal – position themselves at the heart of issues such as sustainability, inclusion, ethics, and the increasing desire of individuals and societies around the world to change life for the better in the face of the Covid-19 pandemic, climate change, supply chain issues, uncertainty, and conflict.
Our agenda for action sets out seven priorities:
- Advancing standards and regulations
- Building resilient economies
- Developing the talent of tomorrow
- Driving sustainable business
- Strengthening ethics and trust
- Supporting entrepreneurial growth
- Transforming the public sector
A perfect storm of challenges has sent the issue of sustainable business in particular rocketing up the corporate agenda, and it’s the biggest source of both risk and opportunity for all of us.
Grain of society
The drive for sustainability means that investors increasingly look at activities which bring dividends greater than a financial return when they are considering how to use capital. More and more, investors seek a commitment to sustainability, placing a premium on long-term stability rather than the instant gratification of a quick dollar. And, of course, there are increasing risks for investors who don’t take this wider view.
This is good news for professional accountants, because we measure success across years and decades rather than just financial quarters, and are increasingly doing so against a whole set of indices – including social value, public wellbeing, and protecting the environment – and on how all of these things impact the finances and risks of an organisation.
Big investors will only commit capital if they are confident their return will be sustainable
Just a few years ago, the idea of business placing the public good and impact on society at the top of its agenda would have been unthinkable. Economic orthodoxy was about maximising profit and the dash for growth. No longer. Any business with ambitions to survive through to the middle of the century and beyond must adopt a new way of keeping score. A new way of measuring value that goes beyond the numbers in the profit and loss columns. It’s the only way they can limit the risk that they will be abandoned and left for dead by investors, consumers and potential employees.
This marks a sea-change in the way business is carried out, and this is the way the grain of society runs now.
That much became clear at the COP26 (Conference of the Parties) summit in Glasgow in 2021, when a day of debate was devoted to the urgent necessity for businesses to realise that big investors will only commit capital if they are confident their return will be sustainable, long-term, and will minimise the risk of climate change, public antipathy and damage to society.
Expensive mistake
No less of a finance figure than Mark Carney, UN Special Envoy for Climate Action and Finance and ex-Bank of England governor, laid it on the line for businesses that relegate the risk of climate change in particular, saying, “Companies that have plans in place to reduce the emissions will find the capital, those who don’t won’t.”
In these days of doubt, we all need to play our part in accounting for a better world. It’s an expensive mistake if we don’t, in more ways than one.
This column appears in the March print edition of The Review.
All CISI members, excluding student members, are eligible to receive a hard copy of the quarterly print edition of the magazine. Members can opt in to receive the print edition by logging in to MyCISI, clicking on My account, then clicking the Communications tab and selecting ‘Yes’.
Once you have read the print edition, keep coming back to the digital edition of The Review, which is updated regularly with news, features and comment about the Institute and the financial services sector.