By Ewan Willars, director of policy, ACCA
Last week, the Prince of Wales’ Accounting for Sustainability project celebrated its 10th year anniversary. The great and the good of the sustainability world gathered in London to mark the occasion. ACCA was there, and we have also helped A4S identify the issues that will matter in the next ten years.
Looking back, the past decade has seen the sustainability agenda championed, challenged, and even denied.
Sustainability has been (and remains) an issue of fervent debate.
Policy-wise, there is of course more work to be done. The outcome of the Rio+20 global summit in 2012 showed that a global consensus on sustainability reporting is hard to achieve. Agreeing on reporting measures remains a challenge.
However, against these dynamic, and often difficult political, social, scientific and environmental contexts, A4S has played an instrumental and highly influential role in leading the sustainability debate. It has pushed for greater transparency from business, for clearer reporting and for an integrated approach to sustainability. A4S’s assertion that sustainability is critical for the future prosperity of the world is one that ACCA supports whole heartedly.
As a member of the executive board of the A4S project, ACCA is proud to play a part in A4S’s important work. With A4S, ACCA has published research into the developments and progress of sustainability and non-financial reporting, examining the wider corporate and social responsibility debate and the part the accountancy profession plays in sustainability reporting.
ACCA has long recognised that sustainable development is critical to society and business. The accountancy profession has a vital role in defining and delivering the means by which sustainable development is measured and reported.
To celebrate the 10th anniversary of A4S we conducted research amongst over 4500 of our students around the world, from Africa to Australia, to understand their hopes, fears and aspirations for the future, and specifically their thoughts on sustainability and business over the next ten years.
The main focus of our questioning was: what will the world look like in 2024 for them, as financial professionals of the future? We wanted to get opinions of tomorrow’s finance professionals on how they believe the global macro sustainability trends will impact businesses and the role of accountants in 10 years from now.
To what extent do you think the following sustainability issues will have impacted businesses by 2024?
We asked the students what they saw as the key global trends that might impact business over the next ten years. The top three concerns were the decline in natural resources; population rise and instability in the finance markets.
The impacts of social, environmental, population, economic and political changes are a concern to the majority of respondents – 78% said this was a worry, agreeing that the sustainability of businesses will be challenged as the world changes in the future.
Looking ahead to 2024 and beyond, to what extent do you agree with the following statements about the possible role of the finance and accounting profession?
- 87% think finance and accounting professionals will need to provide businesses with more decision-making insight than now e.g. forecasting (so, more on what might happen in the future, than recording what has happened)
- 79% think sustainability issues will be more prominent in business
- 74% think the environment’s impact on organisations will be a bigger focus for finance and accounting professionals
- 73% believe the role of finance and accounting professionals will be more crucial to the performance of businesses than it is now
- 68% think sustainability considerations will impact my everyday working life
- 68% believe the finance function will be key to creating a sustainable business
- 62% think business will have established ways of addressing global sustainability issues
- 57% believe there will be greater opportunities for finance and accounting professionals than now
- 34% believe the world will be a better place for me to live in
Our research also showed that finance and accounting professionals will need to provide businesses with more decision-making insight than now, such as forecasting and providing insights on more of what might happen in the future, rather than recording what has happened.
So how can accountants manage these future challenges? ACCA’s policy paper, Sustainability Matters (May 2014), said that the global accountancy profession has an important role in making organisations more responsible and accountable in the pursuit of sustainable development.
From sustainability reporting to integrated reporting; the assurance of non-financial reporting and disclosure; climate change; natural capital and the green economy – accountants are central to making the sustainable equation add up and make business sense.
In terms of integrating sustainability issues into business in the future, do you see finance and accounting professionals becoming…?
- 54% believe they will be much more involved
- 34% said somewhat more involved
- 8% said same level as today
- 3% said less involved
- 1% said not involved
Accountants’ professional skills in developing metrics, information systems, reporting and designing economic instruments, among other business attributes, will help make economies greener, companies more accountable, and achieve global and national measures that look beyond economic output to factor in non-traditional measures, such as human well-being and natural capital.
The bottom line is that the finance professionals of 2024 will have more challenges ahead of them than now, with research from the UN and the OECD telling us that climate change will have a major impact on business. The OECD’s Environmental Outlook 2050 “The Consequences of Inaction” (2012) said that: “Climate change presents a global systemic risk to society. It threatens the basic elements of life for all people: access to water, food production, health, use of land, and physical and natural capital.”
We believe that the young accountants of today will go on to develop the skills, abilities and knowledge to shape and change the future; many are already doing so. Our hope is that by 2024, the accountancy professional, wherever that person may be working, will be creating a brave new world with sustainability integral to it.