The Chartered Institute of Management Accountants (CIMA), the American Institute of Certified Public Accountants (AICPA), and the Canadian Institute of Chartered Accountants (CICA) released a landmark survey measuring the state of accounting for sustainability in the UK and North America.
CIMA, AICPA, and CICA surveyed organizational leaders from their respective memberships and conducted interviews with sustainability executives from leading organizations to examine key characteristics of business sustainability, and the level of finance function involvement in corporate sustainability initiatives.
Charles Tilley, CIMA’s Chief Executive, commented: ‘We are pleased to see CIMA’s members spearheading green practices, with 81 percent of our respondents from large companies reporting that their organization’s sustainability strategies address climate change.’
The joint work with the AICPA and CICA through the Prince of Wales’ Accounting for Sustainability Project has enabled us to share our research and best practice with the other member bodies, he added.
The three accounting organizations are all founding members of the Accounting Bodies Network of the Prince’s Accounting for Sustainability Project meeting in London today.
‘Canada’s CA profession is well positioned to illuminate the relationship between effective social and environmental stewardship and bottom-line performance,’ said Lisa French, principal, guidance and support, CICA.
‘We have long been active in this field and our participation will grow as more organizations recognize that ongoing business success requires sustainable practices. Sustainability is not a one-size-fits-all proposition and accountants can help organizations develop the required infrastructure for effective strategic planning and corporate reporting.’
AICPA Senior Vice President for Member Competency and Development Arleen Thomas said: ‘As companies both large and small incorporate environmental and social considerations into their strategies for long-term business success, U.S. CPAs and other professional accountants have an important role to play.’
The survey report highlights the important work that we have to do in the accounting profession which is why the AICPA is taking a leadership role in the U.S. and collaborating with CIMA, CICA and the Prince’s Project to provide global thought leadership and services to help our members develop skills and competence in sustainability accounting and reporting, he added.
The report notes that organizations that act in a sustainable manner not only help maintain the well-being of the planet and people, they also create businesses that will survive and thrive in the long run. Leading companies recognize that sustainability performance translates to successful bottom-line business performance, and that investors are attracted to companies that act in a sustainable manner with a focus on long-term profitability and competitive advantage.
Key findings
•Compliance with regulatory requirements remains the most common driver of business sustainability (34 percent of large organizations and 24 percent of smaller organizations, respectively) with profitability and other strategic factors reported as being increasingly significant. After compliance, the next most critical drivers differed between large and small companies:
•32 percent of large organizations identified managing reputational risk 19 percent of smaller companies identified cost cutting efficiency.Large companies have more robust sustainability capabilities:
•79 percent of larger companies currently have a formal sustainability strategy, compared to 33 percent of smaller companies, however, an additional 23 percent of smaller companies have plans to formulate a strategy within the next 2 years. The finance function’s contributions to organizational sustainability programs are highly valued, yet underdeveloped:
•56 percent of respondents said that finance play a role in business case/investment analysis. 33 percent are tracking sustainability related performance measures. UK-based organizations appear to be ahead of the curve in terms of implementing sustainability practices and finance function involvement compared to North American organizations.
In an increasingly global community, where economic, environmental, and social issues transcend national and corporate boundaries, 21st century solutions will require a coordinated response by the public and private sectors. Long-term business success will require that sustainable practices be deeply embedded in the ‘DNA’ of all organizations.
As companies innovate to better secure their long-term viability, the accounting profession will play an important role. Accountants can serve as leading agents for change by applying their skills and competencies to develop sustainable strategies and facilitate effective implementation, accurate measurement, and credible business reporting.
The study is available online.
