Environmental sustainability is today at the forefront of consumer attention and boardroom agendas due to climate change. According to a recent Deloitte survey, 98% of consumers think businesses have a duty to improve the world and 35% of brand executives think that consumer views influence their companies’ commitment to sustainability more than requirements from investors, boards, or other stakeholders. By 2025, millennials will constitute 75% of the workforce, and data shows that most prefer working for companies with strong sustainability policies. Investment in sustainability initiatives signals a sought-after corporate culture and strategy.
Global Events and Shifts
Global platforms like COP bring ESG initiatives to the center stage and allow global leaders to deliberate and analyze current strategies to reach related targets. This year, Egypt has hosted COP27 with the mission of achieving progress across the board in a balanced and equitable manner and based on the rules and principles that govern collective action to tackle climate change and its impacts. This entailed delivering a thorough and ambitious mitigation work program, achieving and capturing meaningful progress on the global sustainability goals in a way that fosters trust in the process and allays concerns that developing nations will be asked to contribute to the global effort without being compensated.
Increased expectations from Management Accountants
With such global movements and events in effect, there is an increased expectation for management accountants to deliver enormous value in reducing a company’s carbon footprint by applying their competencies and skills in areas such as strategic planning, financial analysis, risk management, internal controls, and reporting. For management accountants, sustainable business isn’t just about measurement and reporting. To make judgments that are strategic and sustainable for business, finance professionals and leaders need to have the appropriate viewpoint, knowledge, skills, and processes. Management accountants should be concerned about the external effects of corporate activities, as corporate decision-makers seem increasingly under pressure to consider the wider environmental impacts of their companies’ activities. Such pressure comes not just from the need to satisfy public demand for greater social responsibility, but also from stricter environmental regulations and policies. Management accountants are driving an environmentally sustainable agenda to accelerate organizational change to lead and achieve the climate sustainability objectives. While playing a proactive role in meeting the goals, they have a responsibility to clearly communicate a sustainability strategy that could benefit the businesses. In the modern world, a comprehensive long-term perspective is required as the statement holds true that sustainable business is good business.
Giving an analytical approach to data
Organizations may benefit from better data sourcing, collecting, and validation as well as a faster report preparation process if they develop an integrated platform for sustainability reporting. CFOs and their teams may need to create new procedures for automating sustainability data collection for financial purposes, including gathering, analysis, reporting, and engagement with partners to set up these sustainability data management systems. The information that boards and senior leaders use to monitor, create, and modify an organization’s sustainability plan can be improved by these simplified reporting tools once they have been established. This will help finance professionals provide a better picture of the operations and the added impact of the ESG initiatives.
Leveraging technology to drive strategy
Management accountants have both the breadth and depth of skills to satisfy regulatory and investor demands for information, build processes through technology solutions, and gather new types of data to analyze projects that reduce waste and increase efficiency, and implement capital budgets for long-term investments in plant and equipment. While many organizations have some level of tech adoption in their current operations, a significant area of opportunity for CFOs and their team could be optimizing and creating integrated tech-enabled systems—both internally and externally—to effectively measure, monitor, and uncover areas for reducing carbon footprint and approaching ESG goals with better strategies.
CFOs and their teams can help their organizations emerge as sustainability champions by driving digital transformation, enhancing data platforms, tech-enabling financial reporting, and by embedding sustainability across operations. By using the organization’s sustainability priorities as a lens for making strategic choices, finance leaders now have a clear opportunity to step up the organization’s sustainability goals.
