ACCA PM Syllabus B. Specialist Cost And Management Accounting Techniques - Role of Accountants in Developing Sustainable Practices - Notes ^{4 / 7}

The IFAC report on Accounting for Sustainability outlines actions that professional accountants can focus on to promote sustainability in their organisation...

These are:

1. Identify and understand trends and their impact on the organisation's strategy, business model, and performance.

2. Incorporate significant environmental and social factors into management information to shape strategies, plans, targets, and investment decisions.

3. Evaluate the benefits of addressing environmental and social issues, considering their contribution to value creation, cost reduction, revenue generation, employee attractiveness, and reputation improvement.

4. Establish systems, processes, and teams to support decision-making and ensure that important factors are measured and managed.

5. Connect value creation to ensure efficient resource utilisation for the benefit of shareholders, customers, and other stakeholders.

6. Promote efficiency by reducing waste and lowering costs.

7. Enhance the credibility of data and information through effective governance and oversight.

8. Communicate transparently through stakeholder engagement, disclosures, and reporting frameworks like integrated reporting.

By focusing on these actions, professional accountants can play a crucial role in driving sustainability within their organisation.

These actions can be seen in 3 main areas:

1. Leadership and Business Strategy

   To ensure that sustainability initiatives are strategic rather than tactical, finance plays a vital role in:

   Identifying the business case for sustainability at different levels - organisation-wide, project-specific, or issue-specific.

   Facilitating leadership and commitment to sustainability.

   Involving the finance and accounting function in sustainability efforts.

   Connecting sustainability with strategy, risk, and performance by integrating sustainability-related information into areas such as business planning, risk management, performance management, and investment evaluation.

   By adopting these practices, finance helps elevate sustainability to a strategic level within the organisation.

2. Management, Operations and Accounting

   To enhance the process of collecting, analysing, and reporting information and data, finance professionals apply their accounting expertise. 

   They collaborate closely with sustainability professionals and others to determine the relevant information to be captured and its intended use. 

   This involves:
   Generating information and conducting analysis to support decision-making.

   Minimising the environmental and social impact of products, services, and operations.

   By working together, finance and sustainability professionals ensure that information and data related to sustainability are effectively collected, analysed, and reported upon to drive informed decision-making and improve sustainability performance.

3. Communications, Reporting and Disclosure

   Finance professionals play a crucial role in integrating sustainability performance information into business reporting and disclosing it to stakeholders. 

   They accomplish this by:

   Developing a strategy and approach for business reporting.
   Incorporating sustainability impacts into financial reporting.
   Ensuring the accuracy and reliability of sustainability disclosures and reports through assurance processes.

   By fulfilling these responsibilities, finance professionals enable organisations to effectively communicate their ability to create long-term value and demonstrate their commitment to sustainability to stakeholders.