Today, consumers and governments are sharpening their focus on ethical and sustainability issues. Buying habits are changing. Regulations are tightening. And businesses are under increasing scrutiny about their impact on society from the media, consumers, governments and their own employees.
Digital advances such as the use of AI have introduced new ethical complexities to the evolving business world – and businesses should identify and manage these to survive. The profession must be ready to lead the ethical debate on all this change, and use its leading knowledge in ethical issues, combined with a wider view of business success that covers financial, ethical, digital, and sustainability issues.
ACCA is at the leading edge of this change, working with our partners to equip our students and members with the right tools, skills and knowledge to succeed. Ethics and professionalism is essentially about doing the right thing. Now, the urgency is steadily intensifying to make good decisions to address the world’s climate emergency. Record rainfall, longer droughts and destruction from hurricanes are just a few of the weather patterns that are having a devastating impact on the world.
Climate Week was held in New York in late September alongside the United Nations Climate Summit, and at the start of the week at a joint event co-hosted with IFAC, called ‘creating value in a climate emergency’, ACCA launched a new report called Social and Environmental Value Creation.
This report calls for more concerted action to deal with the challenges of social and environmental value creation. It examines the role of business in environmental, social and governance (ESG) issues which are under increasing scrutiny from investors and society more widely. It also assesses the current state of corporate disclosures on key social and environmental issues in different regions around the world and outlines five disclosure and decision-making approaches that can support business to create inclusive and sustainable value for society over the long term.
Its publication comes at a time when businesses are being called on to meet increasing requirements from governments for better social and environmental performance, and respond more proactively to greater demands for more precise environmental, social and governance disclosures from investors. Business is now operating in a volatile environmental landscape in crisis and escalating social problems.
Taken together, these provide businesses around the world with a range of relevant approaches to engage with. For professional accountants and finance teams, their involvement in these activities is essential.
There’s just 10 years left to achieve 17 UN Sustainable Development Goals by 2030, which are becoming better understood by governments, business, investors and civil society as tools to improve economies’ inclusivity and sustainable prosperity.
Governments and regulators are asking businesses to better manage their social and environmental impacts to support sustainable prosperity creation. Citizens are asking their governments to do more to protect the environment and resolve societal issues.
Customers are also asking business and finance to do this. New products and services must be both socially and environmental aware if they are to succeed.
Professional accountants and finance teams can support social and environmental value creation in many ways with their existing skillset and by reaching out across their own organisations. By interacting with wider stakeholders on complex challenges, they will be able to speed up the urgently needed transition to a more socially just and environmental aware future for the global economy.
The report says that the global economy is entering a new era where social and environmental issues are strategic to all activities undertaken by business. It also sets out that the challenges are immense, complex and urgent. But it has also shown how value creation can be realised with the use of existing tools and processes that build on established foundations. They require a shift in values and mindsets by business and a new set of skills for finance teams. And if supported with a better institutional infrastructure, it is likely that managing to exist with the changes to the planet caused by climate change and providing socially just and sustainable livelihoods to current and future generations will be within reach.
The level of engagement with these issues by business and finance will determine the quality of life for people and other species. A choice has to be made, and perhaps now is the time more than ever when the ethical, sustainable choice has to be made decisively. Now is the time to be ‘doing the right thing’.
• Jimmy Greer is Head of Sustainability, Professional Insights at ACCA
